A Calgary-based oil and gas waste company announced on Monday the sale of over $1 billion in assets after the Competition Bureau ordered it to sell 29 facilities to avoid it having outsized control of the market in Western Canada.
Secure Energy Services Inc., which specializes in oilfield waste treatment and disposal, has now sold the facilities formerly owned by Tervita Corporation — the company it merged with in 2021 — for $1.075 billion, plus approximately $75 million for “certain adjustments.”
The sale comes after Secure and Tervita’s 2021 merger was successfully challenged by the Competition Bureau, Canada’s competition watchdog.
Secure concedes to Competition Bureau despite objections
At the time, Secure and Tervita were considered the two largest — and often only — suppliers of oil and gas waste services within the 1.4-million square kilometre reserve of petroleum and natural gas, also known as the Western Canadian Sedimentary Basin (WCSB) — one of the largest reserves in the world.
Secure said in its release that despite its objections to the tribunal’s decision, the sale will end uncertainty or “overhang on the stock” caused by the Bureau’s orders.
“(Secure) continues to believe there are strong grounds for appeal of the Competition Tribunal’s decision,” Secure wrote.
“However, (Secure) decided that it is in the best interest of stakeholders to take control of the process and move forward with a sale that generates significant cash proceeds and provides clear resolution of the competition matter.”
The assets have been sold to Waste Connections Inc., a North American waste services company. More than 250 Secure staff will join the Waste Connections team when the transaction closes, which is planned for early 2024.
Secure has reduced its 2024 capital spend expectations to $60 million on sustaining capital — which includes landfill expansions — and about $15 million on retirement obligations.
The commitments had previously been $85 million and $20 million respectively.
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Federal appeals court upholds decision blocking Calgary oilfield services merger -
Competition Bureau challenges proposed merger of rival Calgary oil service firms
Competition bureau alleged merger would hurt oil and gas producers
Secure unsuccessfully challenged the Competition Bureau’s decision to the Federal Court of Appeal.
The Federal Court found there was “no merit in any of the issues raised by Secure” in its appeal, the bureau said. The decision was announced in early August.
The Commissioner of Competition alleged in the case that the loss of rivalry would hit oil and gas producers with higher prices and reduced quality of service. It also said the merger would result in Secure having market power in 143 local markets within the WCSB.
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