FEB 2 2 20i6

CLERK OF THE COURT
FILED
FEB 2 2 20i6
Clerks stamp:
CALGARY,ALBERTA
Court File Number
1501-12080
Court
COURT OF QUEEN'S BENCH OF ALBERTA
Judicial Centre
CALGARY
Plaintiff
HSBC BANK CANADA
Defendant
ENSECO ENERGY SERVICES CORP. and ENSECO ENERGY
SERVICES USA CORP.
Document
THIRD REPORT TO THE COURT SUBMITTED BY
PRICEWATERHOUSECOOPERS INC.IN ITS
CAPACITY AS RECEIVER
DATED February 22, 2016
Address for Service and Contact
Information of Party Filing this
Document:
Bennett Jones LLP
4500 Bankers Hall East
855 — 2nd Street SW
Calgary, Alberta T2P 4K7
Phone: 403-298-4485
Fax: 403-265-7219
[email protected]
Attention: Chris Simard
pwc
ENSECO ENERGY SERVICES CORP. AND ENSECO ENERGY SERVICES
USA CORP.
RECEIVER'S THIRD REPORT TO COURT
February 22, 2016
TABLE OF CONTENTS
1.
INTRODUCTION ........................................................................................................... 2
2.
STATUS OF THE SALE OF ENSECO’S ASSETS AND TECHMASTER’S FAILURE TO
CLOSE ON ITS OFFER ON THE LEDUC ASSETS........................................................... 3
3.
RECEIVER’S RECOMMENDATION............................................................................... 5
4.
CONCLUSION ............................................................................................................... 6
APPENDICES
A.
Email Correspondence with TechMaster
B.
KCR Letter and February 13, 2016 PwC Letter and Email to TechMaster
C.
Century Services Corp. Auction Proposal for Leduc Assets
1
ENSECO ENERGY SERVICES CORP. AND ENSECO ENERGY SERVICES
USA CORP.
RECEIVER'S THIRD REPORT TO COURT
February 22, 2016
1.
INTRODUCTION
1.1
On October 14, 2015, pursuant to an order of the Court of Queen’s Bench of Alberta (the
“Court” or “Canadian Court”), PricewaterhouseCoopers Inc. (“PwC”) was appointed
as receiver (in such capacity, the “Receiver”), without security, of all of the current and
future assets, undertakings and properties of every nature and kind whatsoever, and
wherever situate including all proceeds thereof of Enseco Energy Services Corp.
(“Enseco Canada”) pursuant to section 243(1) of the Bankruptcy and Insolvency Act,
R.S.C. 1985, c. B-3 (“BIA”).
1.2
Subsequently, on October 21, 2015, PwC was appointed Receiver of Enseco Energy
Services USA Corp. (“Enseco USA”), a wholly owned subsidiary of Enseco Canada
operating in the United States (“U.S.”). The Enseco Canada and Enseco USA
receivership proceedings were consolidated under an Amended and Restated
Receivership Order (the “Receivership Order”).
1.3
Following the commencement of the Receivership proceedings in Canada, the Receiver
sought provisional relief from the United States Bankruptcy Court for the District of
Colorado (the "U.S. Court") pursuant to Chapter 15 of the United States Bankruptcy
Code (“Chapter 15”). On November 3, 2015 a Preliminary Injunction Order was granted
against any person or entity from commencing or continuing any legal proceeding against
the Company.
1.4
A final hearing was held on November 30, 2015 for recognition of the Canadian
proceeding as the Foreign Main Proceeding, pursuant to Chapter 15, and the U.S. Court
granted Recognition Orders for Enseco Canada and Enseco USA.
1.5
Enseco Canada and Enseco USA are collectively referred to herein as “Enseco” or the
“Company”, unless otherwise stated.
1.6
On December 21, 2015 the Receiver assigned Enseco Canada into bankruptcy pursuant to
paragraph 3 (s) of the Receivership Order and PwC was named Trustee of the Estate.
1.7
HSBC Bank Canada (“HSBC”) is the Company’s major secured lender, holding a general
security agreement over all of Company’s present and after acquired personal in Canada
and the U.S.
2
ENSECO ENERGY SERVICES CORP. AND ENSECO ENERGY SERVICES
USA CORP.
RECEIVER'S THIRD REPORT TO COURT
February 22, 2016
2.
1.8
HSBC is the plaintiff in these proceedings and we understand based on the materials filed
in these proceedings that HSBC is owed approximately $16.4 million.
1.9
This is the Receiver’s Third Report to the Court. The purpose of this report is to inform
the Court of the failure of TechMaster Oil Tools Inc. (“TechMaster”) to close on the sale
of the Leduc drilling and MWD assets (Lot 2) (the “Leduc Assets”), such sale having
been approved by the Court on January 12, 2016, and to seek an order approving an
auction of the Leduc Assets by Century Services Corp. (“Century”).
1.10
In accordance with industry practice, except as described in this Third Report, the
Receiver has not audited, reviewed or otherwise attempted to verify the accuracy or
completeness of the information in a manner that would comply with Generally Accepted
Assurance Standards pursuant to the Canadian Institute of Chartered Accountants
Handbook.
1.11
The Receiver reserves the right to refine or amend its comments and findings as further
information is obtained or brought to its attention subsequent to the date of this Third
Report. Unless otherwise stated, all monetary amounts noted herein are expressed in
Canadian dollars.
STATUS OF THE SALE OF ENSECO’S ASSETS AND TECHMASTER’S
FAILURE TO CLOSE ON ITS OFFER ON THE LEDUC ASSETS
2.1
As described in the Receiver’s Second Report dated December 21, 2015, the Receiver
sought approval of offers received on the sale of Enseco’s assets from 1st Rate Energy
Services Inc. (“1st Rate”) for the Grande Prairie/Red Deer production assets (Lot 1);
TechMaster for the Leduc Assets; and, Tiger Capital Group LLC (“Tiger”) for the U.S.
assets (Lots 3 and 4).
2.2
On January 12, 2016 the Canadian Court approved the sale of the Enseco assets to 1st
Rate, TechMaster and Tiger. Subsequently, on or about January 22, 2016 the U.S. Court
approved the sale of the Enseco assets to the above noted parties. The Receiver’s legal
counsel at both the Canadian and U.S. applications advised the Court of its concerns over
the ability of TechMaster to close on its offer.
2.3
The Receiver confirms that 1st Rate and Tiger closed on their offers on or about January
27, 2016 with the balance of their respective purchase prices having been remitted to the
Receiver; however, TechMaster has failed to close in a reasonable time period.
3
ENSECO ENERGY SERVICES CORP. AND ENSECO ENERGY SERVICES
USA CORP.
RECEIVER'S THIRD REPORT TO COURT
February 22, 2016
TechMaster advised that it was having difficulty securing funding for the purchase price.
The Receiver advises that TechMaster’s offer was unconditional.
2.4
The Receiver notes the following with respect to TechMaster:
2.4.1
On December 9, 2015, TechMaster provided the Receiver with a cheque for the
15% deposit which accompanied TechMaster’s offer for the Leduc Assets. That
cheque bounced. Pursuant to the terms and conditions of sale, offerors were to
provide their 15% deposit by way of certified cheque, bank draft or wire;
2.4.2
The Receiver pursued TechMaster for a replacement, certified cheque; however,
TechMaster advised that its partner, who was to provide the funding for its offer,
was in financial difficulty. TechMaster advised that they were in the process of
securing alternate funding from another source;
2.4.3
The Receiver proceeded to seek court approval for the TechMaster offer on
January 12, 2016 and advised TechMaster that it would provide TechMaster until
the end of January to come up with the 15% deposit and, upon receipt, would
consider allowing TechMaster additional time to close the deal, failing which the
Receiver would proceed to realize on the assets by other means;
2.4.4
On February 1, 2016, the Receiver was contacted by a representative of Promerita
Group who advised they were handling the financing of the Leduc transaction on
behalf of TechMaster and offered to pay 50% of the Leduc purchase price with the
balance being paid over a 6 to 9 month period. The Receiver declined this offer.
2.4.5
On February 11, 2016, TechMaster advised they had come to an agreement with a
company named KCR Fund (“KCR”) for the financing of the Leduc purchase
price. On February 13, 2016 a letter on KCR letterhead was provided to the
Receiver by TechMaster advising of KCR’s intention to fund the Leduc
transaction.
2.4.6
On February 13, 2016, the Receiver formally advised TechMaster that
TechMaster had failed to comply with the terms and conditions of sale and that
the Receiver was proceeding to realize on the Leduc Assets.
2.4.7
Attached as Appendix “A” is a copy of various email correspondence between the
Receiver and TechMaster since December 2015. In addition, attached as
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ENSECO ENERGY SERVICES CORP. AND ENSECO ENERGY SERVICES
USA CORP.
RECEIVER'S THIRD REPORT TO COURT
February 22, 2016
Appendix “B” is a copy of KCR’s letter along with the Receiver’s February 13,
2016 letter and email sent to TechMaster.
3.
2.5
In early January 2016 the Receiver approached Century and Tiger to seek auction
proposals for the Leduc Assets as the Receiver had serious concerns that TechMaster
would be unable to close. Both Century and Tiger subsequently provided the Receiver
with auction proposals.
2.6
In addition, the Receiver approached a number of parties who were initially interested in
the Leduc Assets, but who had not submitted offers. Each party advised that they were
interested in some of the Leduc Assets but were not prepared to offer on all Leduc Assets.
2.7
After the issuance of the February 13, 2016 letter to TechMaster, on February 17, 2016
(and with the concurrence of HSBC) the Receiver executed Century’s auction proposal as
the Receiver and HSBC were of the view that the Century proposal would likely yield
higher recoveries than the Tiger proposal. Attached as Appendix “C” is a signed copy of
Century’s auction proposal.
2.8
The general terms of Century’s auction proposal are as follows:
2.8.1
0% commission payable to Century;
2.8.2
Century expenses of $27,500, payable to Century;
2.8.3
Century responsible for charging, collecting and remitting GST;
2.8.4
Century shall be responsible for collection of monies for all sales. All sale
proceeds shall be deposited in a trust account;
2.8.5
Century reserves the right to charge and retain a Buyer’s Premium;
2.8.6
Within 21 days of the sale, Century shall provide a full report of all asset sales
together with sale proceeds in the form of a cheque.
RECEIVER’S RECOMMENDATION
3.1
Despite the Receiver’s efforts to provide TechMaster with additional time, TechMaster
was unable to close on its offer to purchase the Leduc Assets and the Receiver has no
5
ENSECO ENERGY SERVICES CORP. AND ENSECO ENERGY SERVICES
USA CORP.
RECEIVER'S THIRD REPORT TO COURT
February 22, 2016
confidence that TechMaster can secure funding in a reasonable time period in the near
future.
4.
3.2
The Receiver is of the view that remarketing the Leduc Assets for sale to strategic or
industry players would be time consuming, costly and likely not result in the receipt of
any offers. The Receiver’s previous efforts to market and sell the Company’s assets were
described in the Second Report, the results of which were noted in the Bid Summary
attached as Confidential Appendix “H” to the Second Report. As noted above, the
Receiver contacted a number of parties in the industry who had previously viewed the
Leduc Assets and they advised they were not interested in an en bloc purchase of the
Leduc Assets but would be interested if the Leduc Assets were to go to auction.
3.3
Further, the Receiver advises that the monthly rent obligation at the Leduc premises is
approximately $30,000. Accordingly, monthly holding costs are significant. Century has
advised the Receiver that it believes it will be in a position to sell the Leduc Assets and
vacate the Leduc premises by the end of March or shortly thereafter, which will mitigate
these holding costs.
3.4
Accordingly, the Receiver believes that proceeding with Century’s auction proposal is the
best course of action to realize on the Leduc Assets in an efficient, timely and cost
effective manner and that the terms of the Century auction proposal are reasonable.
3.5
Further, HSBC fully supports the Receiver proceeding with Century’s auction proposal.
3.6
The Receiver advises that it will be serving TechMaster with a copy of this Third Report
and application materials.
CONCLUSION
4.1
The Receiver respectfully requests that the Court grant the Receiver’s motion to approve
the auction proposal of Century for the Leduc Assets.
6
ENSECO ENERGY SERVICES CORP. AND ENSECO ENERGY SERVICES
USA CORP.
RECEIVER'S THIRD REPORT TO COURT
February 22, 2016
This report is respectfully submitted this 22nd day of February, 2016
PricewaterhouseCoopers Inc.
In its Capacity as Court Appointed Receiver of Enseco Energy Services Corp. and Enseco
Energy Services USA Corp.
Sean Fleming, CIRP
Senior Vice President
7
APPENDIX A
Email Correspondence with TechMaster
Page 1 of 5
Re: Enseco - Update
Nikan Samimi
to:
Sean Fleming
01/19/2016 02:03 AM
Cc:
Ahmad Moghareh Dehkordy, Mark Wong, TMOT/Kamran
Hide Details
From: Nikan Samimi <[email protected]>
To: Sean Fleming/CA/FAS/PwC@Americas-CA
Cc: Ahmad Moghareh Dehkordy <[email protected]>, Mark
Wong/CA/FAS/PwC@Americas-CA, TMOT / Kamran <[email protected]>
History: This message has been replied to.
Hello Sean,
Our president will be in Alberta this week. He would like to set up a meeting with you in Edmonton in
order to submit our proposal for the timing of the funds to be given to PwC. Please let me know if this is
possible for you, and if so what time works for you.
Best Regards,
NIKAN SAMIMI
Project Coordinator
Techmaster Oil Tools
[email protected]
1 604 727 7371
This communication and any files or attachments transmitted with it may contain information that is confidential, privileged and exempt from disclosure under applicable law. It is intended
solely for the use of the individual or the entity to which it is addressed. If you are not the intended recipient, you are hereby notified that any use, dissemination, or copying of this
communication is strictly prohibited. If you have received this communication in error, please notify us at once so that we may take the appropriate action and avoid troubling you further.
Thank you for your co-operation
On Jan 15, 2016, at 9:38 AM, [email protected] wrote:
Thanks Nikan,
I'm assuming the partner you are negotiating with will be providing the funding for the purchase of the Enseco
equipment. Assuming that is correct and you consummate an agreement shortly, what is the timing/date of the
funds flowing to PwC?
Sean Fleming
PwC | Senior Vice President, Consulting & Deals
T: +1 780 441 6738
Email: [email protected]
Assistant: Nina Jimenez | T: +1 780 441 6701 ext. 3421
PricewaterhouseCoopers Inc.
10088 - 102 Avenue NW, Suite 1501, Edmonton AB T5J 3N5
http://www.pwc.com/ca
<Mail Attachment.png>
See how we’re connected
file:///C:/Users/sfleming010/AppData/Local/Temp/notesF3B52A/~web0509.htm
2/20/2016
Page 2 of 5
From:
Nikan Samimi <[email protected]>
To:
Sean Fleming/CA/FAS/PwC@Americas-CA, Mark Wong/CA/FAS/PwC@Americas-CA
Cc:
Ahmad Moghareh Dehkordy <[email protected]>
Date:
Subject:
01/14/2016 05:06 PM
Enseco - Update
Sean & Mark,
We have come to a verbal agreement with one of the parties we were negotiating with for our project.
This has been a time consuming task because as explained the project we have is large-scale and long
term. It will span the next two years and requires the tools that we have agreed to purchase from Enseco
among other things. The party that we agree to work with will be a part of this project, which makes this
step of negotiations very critical for us. We are now preparing the written agreement, and we estimate
that we should be able to meet the proposed 2 weeks ending on around January 20th, that we discussed
last week.
Best Regards,
NIKAN SAMIMI
Project Coordinator
Techmaster Oil Tools
[email protected]
1 604 727 7371
This communication and any files or attachments transmitted with it may contain information that is confidential, privileged and exempt from disclosure
under applicable law. It is intended solely for the use of the individual or the entity to which it is addressed. If you are not the intended recipient, you are
hereby notified that any use, dissemination, or copying of this communication is strictly prohibited. If you have received this communication in error,
please notify us at once so that we may take the appropriate action and avoid troubling you further. Thank you for your co-operation
Begin forwarded message:
From: Nikan Samimi <[email protected]>
Subject: Enseco - Update
Date: January 13, 2016 at 2:23:32 PM PST
To: [email protected], [email protected]
Cc: Ahmad Moghareh Dehkordy <[email protected]>
Hello Sean & Mark,
Sorry for the late response. We were looking for a response from a number of parties we are negotiating
with. They have been evaluating the documents we obtained from Enseco. We should have a final
response from the partner by tomorrow. We are also continuing negotiations with alternative parties. We
should have a firm date confirmed either by tomorrow or in the next couple of days. The commitment
we discussed over the phone still stands.
Thank you for obtaining the court approval.
file:///C:/Users/sfleming010/AppData/Local/Temp/notesF3B52A/~web0509.htm
2/20/2016
Page 3 of 5
I will keep you posted.
Best Regards,
NIKAN SAMIMI
Project Coordinator
Techmaster Oil Tools
[email protected]
1 604 727 7371
This communication and any files or attachments transmitted with it may contain information that is confidential, privileged and exempt from disclosure
under applicable law. It is intended solely for the use of the individual or the entity to which it is addressed. If you are not the intended recipient, you are
hereby notified that any use, dissemination, or copying of this communication is strictly prohibited. If you have received this communication in error,
please notify us at once so that we may take the appropriate action and avoid troubling you further. Thank you for your co-operation
On Jan 13, 2016, at 9:21 AM, [email protected] wrote:
Nikan
We were in court yesterday and obtained approval of the sale of the Leduc assets to Techmaster. See the
attached order. Accordingly, we would like to proceed with a closing of the transaction with Techmaster asap.
I understand Mark has reached out to you by phone and email over the past week but has not received any
responses. We will have to make a decision soon regarding how we will be moving forward on the sale of Leduc
assets. In this regard, we request the following:
l
l
l
A commitment to provide us with daily updates on the status of funding or payment of the purchase price,
including timely responses to any inquiries we make of you.
A firm commitment date by which Techmaster will pay the purchase price to PwC.
Payment of the deposit immediately.
If we feel that the deal is floundering and Techmaster will be unable to close, we will have no choice but to
proceed with another offer for the Leduc assets. That decision will likely be made in the next 10 days unless
Techmaster can provide us with some comfort that it is able to close, along with providing us with the full amount
of the deposit.
We look forward to your response.
Sean
Sean Fleming
PwC | Senior Vice President, Consulting & Deals
T: +1 780 441 6738
Email: [email protected]
Assistant: Nina Jimenez | T: +1 780 441 6701 ext. 3421
PricewaterhouseCoopers Inc.
10088 - 102 Avenue NW, Suite 1501, Edmonton AB T5J 3N5
http://www.pwc.com/ca
<Mail Attachment.png>
See how we’re connected
----- Forwarded by Sean Fleming/CA/FAS/PwC on 01/13/2016 09:58 AM ----From:
Mark Wong/CA/FAS/PwC
file:///C:/Users/sfleming010/AppData/Local/Temp/notesF3B52A/~web0509.htm
2/20/2016
Page 4 of 5
To:
Date:
Subject:
Sean Fleming/CA/FAS/PwC@Americas-CA
01/13/2016 09:28 AM
Fw: Enseco - Update
Mark Wong, CA, CFA
PwC | Manager, Consulting & Deals
T: +1 780 441 6805 | F: +1 780 441 6776
Email: [email protected]
PricewaterhouseCoopers LLP
10088 - 102 Avenue NW, Suite 1501, Edmonton AB T5J 3N5
http://www.pwc.com/ca
View my profile on Linkedin
----- Forwarded by Mark Wong/CA/FAS/PwC on 01/13/2016 09:28 AM ----From:
To:
Date:
Subject:
Mark Wong/CA/FAS/PwC
Nikan Samimi <[email protected]>@INTL
01/11/2016 09:01 AM
Enseco - Update
Hi Nikan,
Please confirm that you have received the asset documentation requested from Scott.
With respect to the purchase of the Leduc assets, please provide us an update on the status of your negotiations
with your partner.
Regards,
Mark Wong, CA, CFA
PwC | Manager, Consulting & Deals
T: +1 780 441 6805 | F: +1 780 441 6776
Email: [email protected]
PricewaterhouseCoopers LLP
10088 - 102 Avenue NW, Suite 1501, Edmonton AB T5J 3N5
http://www.pwc.com/ca
View my profile on Linkedin
This e-mail is intended only for the person to whom it is addressed (the "addressee") and may contain
confidential and/or privileged material. Any review, retransmission, dissemination or other use that a
person other than the addressee makes of this communication is prohibited and any reliance or decisions
made based on it, are the responsibility of such person. We accept no responsibility for any loss or
damages suffered by any person other than the addressee as a result of decisions made or actions taken
based on this communication or otherwise. If you received this in error, please contact the sender and
destroy all copies of this e-mail.
Ce courriel est strictement réservé à l'usage de la personne à qui il est adressé (le destinataire). Il peut
contenir de l'information privilégiée et confidentielle. L'examen, la réexpédition et la diffusion de ce
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ce courriel par erreur, veuillez communiquer avec son expéditeur et en détruire toutes les copies.
<Techmaster Sale Approval and Vesting Order.pdf>
file:///C:/Users/sfleming010/AppData/Local/Temp/notesF3B52A/~web0509.htm
2/20/2016
Page 1 of 6
Re: Enseco - Wire Instructions
Nikan Samimi
to:
Sean Fleming
12/30/2015 02:21 AM
Cc:
Mark Wong, Ahmad Moghareh Dehkordy
Hide Details
From: Nikan Samimi <[email protected]>
To: Sean Fleming/CA/FAS/PwC@Americas-CA
Cc: Mark Wong/CA/FAS/PwC@Americas-CA, Ahmad Moghareh Dehkordy
<[email protected]>
History: This message has been forwarded.
Hello Sean,
What you have pointed out is understood. We are doing our best to provide the funds for the tools in the
quickest possible way.
As noted the documentation will be very helpful to us in doing so. Please let us know if this
documentation is available, and when it can be provided. Whether (and how much of) this
documentation is available and when it can be provided, will enable us to choose the best path for
providing the funding for the tools.
Thank you,
Nikan
NIKAN SAMIMI
Project Coordinator
Techmaster Oil Tools
[email protected]
1 604 727 7371
This communication and any files or attachments transmitted with it may contain information that is confidential, privileged and exempt from disclosure under applicable law. It is intended
solely for the use of the individual or the entity to which it is addressed. If you are not the intended recipient, you are hereby notified that any use, dissemination, or copying of this
communication is strictly prohibited. If you have received this communication in error, please notify us at once so that we may take the appropriate action and avoid troubling you further.
Thank you for your co-operation
On Dec 29, 2015, at 10:34 AM, [email protected] wrote:
Nikan,
Mark has kept me apprised of the issue with TechMaster. To summarize:
l
l
l
l
l
No certified cheque was provided with TechMaster's offer despite assurances leading up to the Bid
Deadline that one would be provided.
We accepted TechMaster's offer, deposited the cheque provided with TechMaster's offer and discovered
after that there were insufficient funds in TechMaster's bank account.
We were subsequently advised that a certified replacement cheque was in transit.
When we followed up with the status of this cheque, we were advised that a wire for the deposit would be
made instead and wire instructions were provided by PwC to TechMaster
Now we are advised that funding for TechMaster's offer is an issue due to concerns from an investor over
the "as is, where is" condition.
file:///C:/Users/sfleming010/AppData/Local/Temp/notesF3B52A/~web9058.htm
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Page 2 of 6
To be frank, we are extremely disappointed with TechMaster's handling of its offer. To be clear, the offer
submitted by TechMaster is subject to the Terms and Conditions of Sale which were accepted by TechMaster
when it submitted its offer. As a reminder, set out below are the key terms agreed to by TechMaster:
l
l
l
l
Para 5 - All tenders must be accompanied by a certified cheque or bank draft payable to
“PricewaterhouseCoopers Inc., Receiver of Enseco”, for an amount equal to 15 percent of the Tender
(the“Deposit”). If the tender is accepted, the Deposit will be applied to the purchase price on closing. The
tenderer hereby agrees that the Deposit, subject always to paragraph 22, constitutes a genuine preestimate of damages and that the Deposit will be forfeited as liquidated damages by the tenderer to the
Receiver if the tender is withdrawn at any time before notification of the acceptance of the successful
tender has been given. Otherwise, the Deposit shall be returned to the tenderer if the tender is not
accepted and if the tender is accepted, the Deposit will be dealt with in accordance with the Terms and
Conditions of Sale.
Para 6 - In consideration of the Receiver making available the Terms and Conditions of Sale and/or in
consideration of receiving and considering any tender submitted, each tenderer agrees that its tender is
irrevocable and cannot be retracted, withdrawn, varied or countermanded prior to acceptance or rejection
thereof.
Para 12 - The Assets are being sold on an “as is, where is” basis. Without limiting the generality of the
foregoing, a tender will be accepted on the basis that no representation, warranty, inducement or condition
has been expressed, given or made or can be implied as to title, size, description, fitness for purpose or
intended use, quantity, number, condition or quality of the Assets or in respect of any other matter or thing
whatsoever, and the tenderer shall be deemed to have relied entirely upon his own inspection and
investigation of the Assets. All conditions and warranties provided for in the Alberta Sale of Goods Act and
any other relevant legislation in Canada or the United States are waived by the tenderer.
Para 22 - If the Purchaser fails to comply with the terms and conditions of the Agreement, the
Deposit and all other payments shall be forfeited and the Assets may be sold, and the deficiency, if
any, by such resale, together with all costs, expenses and charges attending to the same or
occasioned by such default, shall be paid forthwith by the Purchaser to the Receiver on demand
We have accepted TechMaster's offer and are proceeding to obtain Court approval. Accordingly, we expect
TechMaster to close the sale and remit the full amount of the purchase price to PwC once Court approval is
obtained in the middle of January. If TechMaster fails to close, we will have no choice but to pursue our legal
remedies. We draw your attention to paragraph 22 of the Terms and Conditions of Sale (bolded above).
While we are open to assisting TechMaster with providing whatever documentation is in our possession regarding
the kits, and we understand there are not issues with respect to the assets, we note that TechMaster has already
agreed that it has conducted its owned due diligence and inspection of the assets and is purchasing the assets,
"as is, where is". Therefore, from our perspective the availability of this documentation has no bearing on
TechMaster's offer and the closing of the sale.
Accordingly, we request the 15% deposit to be wired to us immediately. Please confirm to us within the next two
days that the wire payment has been made, failing which we will be pursuing other offers and seeking our
remedies against TechMaster pursuant to paragraph 22.
If you have any questions regarding the foregoing, please do not hesitate to contact us.
Regards,
Sea
Sean Fleming
PwC | Senior Vice President, Consulting & Deals
T: +1 780 441 6738
Email: [email protected]
Assistant: Nina Jimenez | T: +1 780 441 6701 ext. 3421
PricewaterhouseCoopers Inc.
file:///C:/Users/sfleming010/AppData/Local/Temp/notesF3B52A/~web9058.htm
2/20/2016
Page 3 of 6
10088 - 102 Avenue NW, Suite 1501, Edmonton AB T5J 3N5
http://www.pwc.com/ca
<Mail Attachment.png>
See how we’re connected
----- Forwarded by Sean Fleming/CA/FAS/PwC on 12/29/2015 10:26 AM ----From:
To:
Date:
Subject:
Mark Wong/CA/FAS/PwC
Sean Fleming/CA/FAS/PwC@americas-ca
12/29/2015 10:01 AM
Fwd: Enseco - Wire Instructions
Mark Wong, CA, CFA
PwC | Manager, Consulting & Deals
T: +1 780 441 6805 | F: +1 780 441 6776
Email: [email protected]
PricewaterhouseCoopers LLP
10088 - 102 Avenue NW, Suite 1501, Edmonton AB T5J 3N5
http://www.pwc.com/ca
View my profile on Linkedin
Begin forwarded message:
From: "Nikan Samimi" <[email protected]>
Date: December 28, 2015 at 3:35:37 PM MST
To: "Mark Wong" <[email protected]>
Subject: Re: Enseco - Wire Instructions
Hi Mark,
I have been speaking to the company owners and investors to figure out the situation. I was waiting to
reach a conclusion on where we stand.
First of all note that we have projects that require these tools, so there is no doubt that these tools are
needed. However, as discussed last week, one of the partners has become hesitant about the investment
that he is going to have to put in. This is due to the tools being sold “as is”. His concern is that what if a
number of the kits that we are purchasing do not work (beyond what can be fixed with regular service).
To address this concern, the simple solution for us is that we provide documentation such as test and
calibration records showing these tools are in working condition. This is documentation which these
tools are required to have, and we are quite certain that they should be available at Enseco, as we have
purchased similar tools in 2014 and 2015 from Enseco before (2 purchases with a total value of about
$1.5 million USD). We need your cooperation in collecting these documents so we can satisfy this
partner. We can send our personnel to assist with this.
Convincing that one partner is the quickest way, however we have been working with other parties as
alternatives to this partner for the investment, since as stated these tools are needed. These parties have
shown high interest, and we are sure that this project will happen, the only issue is the timing.
file:///C:/Users/sfleming010/AppData/Local/Temp/notesF3B52A/~web9058.htm
2/20/2016
Page 4 of 6
Merry Christmas, and a happy new year in advance.
Best Regards,
NIKAN SAMIMI
Project Coordinator
Techmaster Oil Tools
[email protected]
1 604 727 7371
This communication and any files or attachments transmitted with it may contain information that is confidential, privileged and exempt from disclosure
under applicable law. It is intended solely for the use of the individual or the entity to which it is addressed. If you are not the intended recipient, you are
hereby notified that any use, dissemination, or copying of this communication is strictly prohibited. If you have received this communication in error,
please notify us at once so that we may take the appropriate action and avoid troubling you further. Thank you for your co-operation
On Dec 28, 2015, at 1:15 PM, [email protected] wrote:
Nikan,
Please provide us with an update via e-mail asap.
We still have not received confirmation of the wire at this time and will be looking to pursue other avenues if
necessary.
Regards,
Mark Wong, CA, CFA
PwC | Manager, Consulting & Deals
T: +1 780 441 6805 | F: +1 780 441 6776
Email: [email protected]
PricewaterhouseCoopers LLP
10088 - 102 Avenue NW, Suite 1501, Edmonton AB T5J 3N5
http://www.pwc.com/ca
View my profile on Linkedin
----- Forwarded by Mark Wong/CA/FAS/PwC on 12/28/2015 02:14 PM ----From:
Mark Wong/CA/FAS/PwC
To:
[email protected]
Cc:
[email protected], [email protected], Sean Fleming/CA/FAS/PwC@Americas-CA
Date:
12/23/2015 10:39 AM
Subject:
Fw: Enseco - Wire Instructions
Nikan,
Further to our last e-mail (see below), we have not received a wire confirmation or any form of correspondence
from TechMaster. Further, we were unable to get a hold of you via telephone this morning.
Please contact us as soon as possible.
Regards,
Mark Wong, CA, CFA
PwC | Manager, Consulting & Deals
file:///C:/Users/sfleming010/AppData/Local/Temp/notesF3B52A/~web9058.htm
2/20/2016
Page 5 of 6
T: +1 780 441 6805 | F: +1 780 441 6776
Email: [email protected]
PricewaterhouseCoopers LLP
10088 - 102 Avenue NW, Suite 1501, Edmonton AB T5J 3N5
http://www.pwc.com/ca
View my profile on Linkedin
----- Forwarded by Mark Wong/CA/FAS/PwC on 12/23/2015 10:37 AM ----From:
Mark Wong/CA/FAS/PwC
To:
[email protected]
Cc:
[email protected], [email protected]
Date:
12/22/2015 12:55 PM
Subject:
Enseco - Wire Instructions
Nikan,
Further to our conversation this morning, we confirm having advised you that the Receiver has been
communicating with representatives of TechMaster for several weeks regarding TechMaster's offer for the Leduc
assets and the deposit which accompanied the offer. At the time of the receipt of the offer, we drew attention to
TechMaster that the cheque was not certified. Upon notifying TechMaster of the Receiver's acceptance of the
offer on Lot 2, we advised TechMaster that we would be depositing the deposit cheque. You have advised us
that although the deposit cheque was signed by TechMaster and issued to PwC, there are insufficient funds in
TechMaster's bank account to cover this cheque.
We draw your attention to paragraphs 5, 16 and 22 of the Terms and Conditions of Sale described in the
Information Package, which TechMaster agreed it was subject to when TechMaster submitted its offer. In this
regard, we request the entire amount of the Lot 2 purchase price, totalling $ MM ($ MM + GST of $
), be
wired to us immediately. We understand you will be working to have these funds wired to us immediately. In
addition, we confirm having advised you that we will hold these funds in trust pending court approval and the
closing of the sale anticipated to occur around January 12, 2016. Set out below is the wire instructions for this
amount.
Beneficiary Bank
SWIFT Code
Bank Address
Beneficiary Acc#:
Beneficiary Name:
Name
Royal Bank of Canada
10117 Jasper Avenue, Edmonton, Alberta T5J 1W8
Transit #
& Account #
PricewaterhouseCoopers Inc. Receiver of Enseco Energy Services USA Corp.
1501, 10088-102 Avenue NW, Edmonton, AB T5J 3N5
We request you provide us with a copy of the wire confirmation once the wire has been process. If you have any
questions or concerns regarding the foregoing, we request you contact us immediately.
Regards,
Mark Wong, CA, CFA
PwC | Manager, Consulting & Deals
T: +1 780 441 6805 | F: +1 780 441 6776
Email: [email protected]
PricewaterhouseCoopers LLP
10088 - 102 Avenue NW, Suite 1501, Edmonton AB T5J 3N5
http://www.pwc.com/ca
View my profile on Linkedin
This e-mail is intended only for the person to whom it is addressed (the "addressee") and may contain
confidential and/or privileged material. Any review, retransmission, dissemination or other use that a
person other than the addressee makes of this communication is prohibited and any reliance or decisions
made based on it, are the responsibility of such person. We accept no responsibility for any loss or
file:///C:/Users/sfleming010/AppData/Local/Temp/notesF3B52A/~web9058.htm
2/20/2016
APPENDIX B
February 13, 2016 PwC Letter and Email to
TechMaster
KCR Letter to PwC attached to TechMaster Email
dated February 13, 2016
February 13, 2016
Mr. Kamran Samimi
President
Techmaster Oil Tools Inc.
5222 22 Avenue NW
Calgary, AB
T3B 0Y9
Dear Sirs:
Enseco Energy Services Corp. (“Enseco”) - In Receivership
Techmaster Oil Tools Inc. (“Techmaster”) - Offer on Leduc Assets
As you are aware, on December 9, 2015 Techmaster submitted an unconditional offer to purchase the
Enseco Leduc assets (Lot 2) pursuant to a sales process conducted by PwC in its capacity as Court
appointed Receiver of Enseco. On December 21, 2015, the Receiver accepted Techmaster’s offer and
subsequently obtained Court approval on January 12, 2016.
As of the date of this letter, and despite additional time afforded Techmaster by the Receiver to obtain
funding, we confirm the following:
1.
Techmaster failed to provide the Receiver with funds representing the 15% deposit required to be
submitted with Techmaster’s December 9, 2015 offer;
2. Techmaster advised that it does not having sufficient funds to complete the transaction or to
provide the Receiver with the 15%; and
3. Despite efforts to secure funding, Techmaster has failed to close on its offer to purchase the Leduc
assets in a reasonable time period and the Receiver does not have confidence funding is
forthcoming in the near future.
Accordingly, we advise that Techmaster has failed to comply with the terms and conditions of sale outlined
in the Receiver’s Information Package dated November 11, 2015. Accordingly, pursuant to paragraph 22 of
the terms and conditions, the Receiver is now free to sell the Leduc assets and pursue Techmaster for any
deficiency by such resale, together with all costs, expenses and charges attending to the same.
Yours truly,
PricewaterhouseCoopers Inc.
Receiver of Enseco Energy Services Corp.
Sean Fleming, CIRP
Senior Vice President
Consulting and Deals
PricewaterhouseCoopers Inc.
TD Tower, 10088 102 Avenue NW, Suite 1501, Edmonton, Alberta, Canada T5J 3N5
T: +1 780 441 6700, F: +1 780 441 6776, www.pwc.com/ca
Re: Enseco - Status Update
Sean Fleming
to: Kamran Samimi <[email protected]>
02/13/2016 12:37 PM
Chris Mcleod, Farid Rohani, Marin Katusa, Mark Wong, Nikan
Cc:
Samimi
Kamran Samimi
Enseco - Status Update
Kamran, I did not receive a call from KCR yesterday. Regardless, we are still proceeding forw
Sean Fleming
Sean, My apologies the attachment was supposed to be sent to you yesterday. There w
Kamran Samimi
Unfortunately we know nothing of KCR, their ability to fund or to even close a tran
Sean Fleming
Unfortunately we know nothing of KCR, their ability to fund or to even close a transaction. A letter of their
intention and financial statements are not sufficient, they are simply pieces of paper. As we have stated
on several occasions, we need evidence of a commitment to complete the deal, meaning a significant
non-refundable deposit or the full amount of the purchase price. If that was provided then we would likely
provide Techmaster with additional time. To date, we have neither and we cannot wait any longer.
Please see the attached letter.
Sean Fleming
PwC | Senior Vice President, Consulting & Deals
T: +1 780 441 6738
Email: [email protected]
Assistant: Nina Jimenez | T: +1 780 441 6701 ext. 3421
PricewaterhouseCoopers Inc.
10088 - 102 Avenue NW, Suite 1501, Edmonton AB T5J 3N5
http://www.pwc.com/ca
See how we’re connected
Kamran Samimi
From:
To:
Cc:
Date:
Subject:
Sean, My apologies the attachment was suppos...
02/13/2016 12:51:46 AM
Kamran Samimi <[email protected]>
Sean Fleming/CA/FAS/PwC@Americas-CA
Chris Mcleod <[email protected]>, Farid Rohani <[email protected]>, Mark
Wong/CA/FAS/PwC@Americas-CA, Nikan Samimi <[email protected]>, Marin Katusa
<[email protected]>
02/13/2016 12:51 AM
Enseco - Status Update
Sean,
My apologies the attachment was supposed to be sent to you yesterday. There was a
misunderstanding in who was going to send the email.
Please review the attachment and inform me of your opinion.
Best Regards,
Kamran
From: "[email protected]" <[email protected]>
Date: Friday, February 12, 2016 at 7:26 AM
To: Kamran Samimi <[email protected]>
Cc: Chris Mcleod <[email protected]>, Farid Rohani <[email protected]>, "
[email protected]" <[email protected]>, Nikan Samimi <
[email protected]>
Subject: Re: Enseco - Status Update
Kamran,
I did not receive a call from KCR yesterday. Regardless, we are still proceeding forward as noted
in my email of February 10. If we are able to get the funds from Techmaster in the next day or so,
then we might be able to circumvent the process; however, until I see something concrete
(meaning cash in our bank account pursuant to the Techmaster offer) I have to proceed as
outlined.
Regards,
Sean
Sean Fleming
PwC | Senior Vice President, Consulting & Deals
T: +1 780 441 6738
Email: [email protected]
Assistant: Nina Jimenez | T: +1 780 441 6701 ext. 3421
PricewaterhouseCoopers Inc.
10088 - 102 Avenue NW, Suite 1501, Edmonton AB T5J 3N5
http://www.pwc.com/ca
See how we’re connected
From:
Kamran Samimi <[email protected]>
To:
Sean Fleming/CA/FAS/PwC@Americas-CA
Cc:
Mark Wong/CA/FAS/PwC@Americas-CA, Nikan Samimi <[email protected]>, Farid Rohani <
[email protected]>, "Chris Mcleod" <[email protected]>
Date:
02/11/2016 03:13 AM
Subject:
Enseco - Status Update
Sean,
Good news. We have finally come to a solid agreement for the financing of the deal.
We have come to an agreement with KCR Fund. They will be contacting you today to confirm this
with you.
My apologize for the inconvenience we have caused you.
Best Regards,
Kamran
From: "[email protected]" <[email protected]>
Date: Wednesday, February 10, 2016 at 11:10 AM
To: Farid Rohani <[email protected]>
Cc: Kamran Samimi <[email protected]>, "[email protected]" <
[email protected]>, Nikan Samimi <[email protected]>
Subject: Re: Enseco - Status Update
Farid,
Unfortunately, $30K offer will not work. I have seen nothing that gives me confidence that
Techmaster will be able to close in 3 weeks. I will be sending Techmaster a formal letter
advising of the same. The time has come where we have to move forward with other options to
realize on these assets. It has been 2 months since we received the offer from Techmaster and
we are no further ahead. In fact, the delay has only resulted in additional costs for us.
Regards,
Sean
Sean Fleming
PwC | Senior Vice President, Consulting & Deals
T: +1 780 441 6738
Email: [email protected]
Assistant: Nina Jimenez | T: +1 780 441 6701 ext. 3421
PricewaterhouseCoopers Inc.
10088 - 102 Avenue NW, Suite 1501, Edmonton AB T5J 3N5
http://www.pwc.com/ca
See how we’re connected
From:
Farid Rohani <[email protected]>
To:
Sean Fleming/CA/FAS/PwC@Americas-CA
Cc:
Kamran Samimi <[email protected]>, Mark Wong/CA/FAS/PwC@Americas-CA, Nikan Samimi <
[email protected]>
Date:
02/08/2016 02:13 PM
Subject:
Re: Enseco - Status Update
Dear Sean,
My apologies, it is a long weekend here and we hit the weekend in the Middle
East waiting for the information to arrive.
Kamran is stuck between a rock and a hard place with people delaying the
promises to him. As such he notified me this morning that his team is prepared
to advance $30,000 and close in three weeks and I am advising you of the
same.
Please note that everyone is wishing to make this happen and the distance,
timing and commitments are not looked at as time sensitive as they are here.
If there are any issues please advise
Thanks
Farid
On Fri, Feb 5, 2016 at 12:01 PM, <[email protected]> wrote:
Farid, do you have any further information?
Sent from IBM Verse
Farid Rohani --- Re: Enseco - Status Update --From: "Farid Rohani" <[email protected]>
To:
"Sean Fleming" <[email protected]>
Cc:
"Kamran Samimi" <[email protected]>, "Mark Wong" <[email protected]>,
[email protected]
Date: Wed, Feb 3, 2016 4:43 PM
Subject Re: Enseco - Status Update
:
Dear Sean
I have communicated your points through Kamran to the overseas purchase
group. They wish to do the deal and considering your requirements wish to find
an alternative way forward to avoid the terms that would slow the delivery.
An alternative that was suggested is payment by way of an LC to us and we
would then discount and pay to you .
Kamranand his team are working hard to make this happen but are limited by the
time difference.
Please allow one more day for the Middle East group to advise response by end
of day tomorrow
Best regards
Farid
On Wednesday, 3 February 2016, <[email protected]> wrote:
Please let me know what you propose by the end of today so we can make a decision on next
steps.
Sean Fleming
PwC | Senior Vice President, Consulting & Deals
T: +1 780 441 6738
Email: [email protected]
Assistant: Nina Jimenez | T: +1 780 441 6701 ext. 3421
PricewaterhouseCoopers Inc.
10088 - 102 Avenue NW, Suite 1501, Edmonton AB T5J 3N5
http://www.pwc.com/ca
See how we’re connected
From:
Farid Rohani <[email protected]>
To:
Sean Fleming/CA/FAS/PwC@Americas-CA
Cc:
Kamran Samimi <[email protected]>, Mark Wong/CA/FAS/PwC@Americas-CA, "[email protected]" <
[email protected]>
Date:
02/02/2016 01:22 PM
Subject:
Re: Enseco - Status Update
Dear Sean,
Thank you for your quick turn around email.
While we appreciate your concerns, we are under a financial crunch that
prohibits some of the terms you have suggested, please allow Kamran and I to
meet and figure out what is our best recourse,
Best Regards
Farid
On Tue, Feb 2, 2016 at 11:38 AM, <[email protected]> wrote:
Kamran/Farid,
I've spoken with HSBC. They are concerned with proposed 6 - 9 month period for the payment in
full of the purchase price, which they view as too long a time frame. While they appreciate the
offer of 50% of the purchase price and Techmaster only taking 25% of the assets initially, they
have advised that the following terms would be acceptable to them.

PwC and Techmaster must come to an agreement by tomorrow afternoon based on the
foregoing terms.

$
million paid to PwC immediately representing 65% of the purchase price, plus 3
months rent in advance (approx. $90K)to account for the storage/holding costs of the
Receiver for the balance of the assets at the leased premises in Leduc.

Techmaster cannot cherry pick the high quality assets comprising the 25% it proposes to





take, leaving the Receiver with less than desirable assets. We can work with you on the
list of assets to be released.
Techmaster will be given 60 days to pay a further $
(minimum) to PwC, failing which
PwC will be free to dispose of the remainder of the equipment in its possession. We note
the 3 months prepaid rent will cover the 2 month time frame for additional funding with the
remaining month to cover off if we have to go with another offer.
If Techmaster pays the $
, we will provide a further 2 months to pay the balance of
the $ MM and release a further 25% of the assets, leaving us with 50% in our
possession.
Techmaster to pay a further 3 months rent.
If Techmaster does not pay the remaining balance, PwC will be free to dispose of the
remainder of the equipment.
If at any time the Leduc landlord demands the Receiver vacate the premises, Techmaster
will pay all moving costs to relocate the equipment.
Please advise.
Regards,
Sean
Sean Fleming
PwC | Senior Vice President, Consulting & Deals
T: +1 780 441 6738
Email: [email protected]
Assistant: Nina Jimenez | T: +1 780 441 6701 ext. 3421
PricewaterhouseCoopers Inc.
10088 - 102 Avenue NW, Suite 1501, Edmonton AB T5J 3N5
http://www.pwc.com/ca
See how we’re connected
From:
Kamran Samimi <[email protected]>
To:
Sean Fleming/CA/FAS/PwC@Americas-CA
Cc:
Mark Wong/CA/FAS/PwC@Americas-CA, "[email protected]" <[email protected]>, Farid Rohani
<[email protected]>
Date:
02/01/2016 01:13 AM
Subject:
Enseco - Status Update
Dear Sean,
My apologies for the late response. We were looking to reach some firm results for the financing
of the deal, which we now have.
We have come to an agreement with the Promerita group for the handling and finance of this
deal. They will be reaching out to you to coordinate the details.
Mr. Farid Rohani is our contact person at Prometira and will be contacting you on Monday.
Best Regards,
Ba Salaam,
From: "[email protected]" <[email protected]>
Date: Friday, January 29, 2016 at 1:16 PM
To: Kamran Samimi <[email protected]>, Nikan Samimi <[email protected]>
Cc: "[email protected]" <[email protected]>
Subject: Re: Enseco - Status Update
Gentlemen,
Any response on our update request below?
Sean Fleming
PwC | Senior Vice President, Consulting & Deals
T: +1 780 441 6738
Email: [email protected]
Assistant: Nina Jimenez | T: +1 780 441 6701 ext. 3421
PricewaterhouseCoopers Inc.
10088 - 102 Avenue NW, Suite 1501, Edmonton AB T5J 3N5
http://www.pwc.com/ca
See how we’re connected
From:
Mark Wong/CA/FAS/PwC
To:
[email protected]
Cc:
Nikan Samimi <[email protected]>@INTL, Sean Fleming/CA/FAS/PwC@Americas-CA
Date:
01/27/2016 01:26 PM
Subject:
Enseco - Status Update
Kamran,
We are approaching the end of the month and request a status update on the financing
arrangement Techmaster was negotiating.
Regards,
Mark Wong, CA, CFA
PwC | Manager, Consulting & Deals
T: +1 780 441 6805 | F: +1 780 441 6776
Email: [email protected]
PricewaterhouseCoopers LLP
10088 - 102 Avenue NW, Suite 1501, Edmonton AB T5J 3N5
http://www.pwc.com/ca
View my profile on Linkedin
This e-mail is intended only for the person to whom it is addressed (the "addressee") and may
contain confidential and/or privileged material. Any review, retransmission, dissemination or other
use that a person other than the addressee makes of this communication is prohibited and any
reliance or decisions made based on it, are the responsibility of such person. We accept no
responsibility for any loss or damages suffered by any person other than the addressee as a result
Sean Fleming
PwC | Senior Vice President, Consulting & Deals
T: +1 780 441 6738
Email: [email protected]
Assistant: Nina Jimenez | T: +1 780 441 6701 ext. 3421
PricewaterhouseCoopers Inc.
10088 - 102 Avenue NW, Suite 1501, Edmonton AB T5J 3N5
http://www.pwc.com/ca
February 11, 2016
Ref: Enseco Leduc Sales of Assets
Dear Sean,
KCR Fund has reviewed the proposed business plan presented by Techmaster
regarding the expansion of their existing Directional Drilling business in the Middle East.
We are providing this letter to confirm that we have come to an agreement with
Techmaster for a partnership in their project through a financial investment and
technical support during the implementation of the project. As part of our investment in
the project we will be financing the purchase of the Enseco Leduc assets sold through
tender and awarded to Techmaster, January 13, 2016.
The assets will be a key part of the investment required to expand the Directional
Drilling business in the Middle East. We have completed our due diligence and are
finalizing the MOU to enable our lawyers to complete drafting the final agreement. This
process should be completed within the next two weeks. We have only been brought
into this project recently and have expedited the process as Techmaster has made us
aware of the sense of urgency to consummate the agreement to complete the
transaction with PWC/Enseco.
P.O. Box 1423 • 673 South Main Street • Stowe, VT 05672
Phone: (802)253-3731 • Email: [email protected]
As noted in the attached 2014 audited financial statements and the internally prepared
2015 statements, KCR Fund has the financial liquidity to complete this transaction.
KCR has invested in venture capital oil and gas projects in the past and is familiar with
the industry and the risks associated with the business. KCR is writing this letter to
confirm our intention to close the transaction and fund the project to complete the
acquisition of the Enseco Leduc assets. Our expectations is this transaction will be
completed within the next two weeks.
We are available to further discuss our commitment to consummate this deal if you
require further assurance.
Sincerely,
Marin Katusa
KCR Fund
cc: Kamaran Samimi, Techmaster
P.O. Box 1423 • 673 South Main Street • Stowe, VT 05672
Phone: (802)253-3731 • Email: [email protected]
KCR financial statements attached to KCR’s letter redacted from report due to the
Receiver’s concern over confidentiality in respect of these statements
APPENDIX C
Century Services Auction Proposal for the Leduc
Assets
www.centuryservices.com
11h
310, 318Avenue SE.
Calgary, AB T2G 0Y2
Phone: (403) 294-9400
Fax: (403) 294-9409
January 12, 2016
Sent via E-mail: sean. e.fleiningca.pwc. corn
PricewaterhouseCoopers Inc.
Receiver of Enseco Energy Services Corp.
1501 Toronto Dominion Tower
Edmonton, AB T5J 3N5
Attention: Mr. Sean Fleming
RE: ENSECO ENERGY SERVICES CORP. (Leduc, Alberta)
Dear Sir:
Century Services Corp. ("C'entuiy") has reviewed certain fixed assets and inventory, ("collectively Assets")
of the above-noted Company, per the listing provided by PWC and as viewed at 108 & 109, 3903-75th
Avenue Leduc, Alberta T9E 0K3 on November 24, 2015, and propose the following method of disposal of
same:
ZERO COMMISSION
0% Commissioii plus $27,500 in expenses
This Proposal shall be subject to the following General Limiting Conditions and Critical
Assumptions:
1. Century offers its services to operate an Auction on mutually agreed upon date, at a 0% commission plus
costs in the amount of $27,500.
2. Century will conduct a live, onsite Auction, with live online bidding.
3. Century assumes all tenderers are tendering on the same group of Assets and reserve the right to amend
this Proposal should this not be the case.
4. The Assets are free and clear of all liens and encumbrances. Century shall be indemnified and held
harmless by PWC against any claim or action arising as a result of dealing with said Assets that were
represented as being free and clear.
CALGARY
C
EDMONTON
C
GRANDE PRAIRIE
C
MONTREAL
C
TORONTO
C
PHOENIX
PricewaterhouseCoopers Inc.
Attn: Mr. Sean Fleming
Re: Enseco Energy Services Corp. (Leduc, Alberta)
5. Century will be permitted the use of "PricewaterhouseCoopers Inc." and "Enseco Energy Services
Corp." in advertising an Auction related to the Assets. Century will be allowed to advertise the Auction
as a Receivership Auction.
6. Centuiy will have unrestricted, free use of the premises which shall include rent, occupancy costs,
property tax, utilities, telephone, business tax, etc. until mutually agreed upon date. Same shall be left in
broom-swept condition upon vacating.
7. Century assumes no responsibility for disposal or proper treatment of any hazardous materials as defined
by municipal, provincial or federal legislation.
8. Clean up and garbage disposal expenses incurred shall be billed separately to PWC.
9. Century reserve the right to abandon any unsold Assets.
10. This Proposal shall be considered en bloc and shall be rendered null and void, at Century's sole option,
should any items offered on be withdrawn.
11. Century reserve the right to amend this Proposal in the event that between the date of this letter and the
date or proposed date of the auction or sale there occurs an event of force majeure which shall include,
but not be limited to, acts of God, riots, civil disturbances, strikes, lock-outs, acts of war, terrorism,
insurrection and the like.
12. Centuiy shall have an inspection period prior to the Auction.
13. Century shall set-up, detail and catalogue the Assets to be sold by Auction.
14. Century shall advertise where applicable an Auction through relevant daily, weekly and trade papers;
through exposure on the World Wide Web (including social media); through pamphieteering to trade
related companies; to Century contacts from previous like sales; and through direct telephone
solicitation to relevant potential purchasers.
15. Century shall be responsible for charging, collecting and remitting the GST where it has been notified
said tax is applicable.
16. Century shall continue to carry a $5 million Comprehensive General Liability insurance policy covering
personal injury and property damage that may occur during the Auction as described above. PWC shall
satisfactorily insure the Assets Century is liquidating.
17. Century shall be responsible for collection of monies for all sales and will guarantee payment once
collected. All sale proceeds shall be deposited in a trust account.
18. PWC shall be responsible for merchant charges related to monies received from bank card transactions.
19. Century reserve the right to charge and retain a Buyer's Premium. Any Buyer's Premium collected will
be to the sole account of Century and will not constitute sales for the purpose of calculating any splits
outlined below.
20. Century shall have the option of adding other assets to enhance the sale.
21. Within 21 days of the sale, Century shall provide a full report of all Asset sales together with sale
proceeds in the form of a cheque.
C
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PricewaterhouseCoopers Inc.
Attn: Mr. Sean Fleming
Re: Enseco Energy Services Corp. (Leduc, Alberta)
In order to comply with the timetable outlined, the above proposal shall remain open until 5:00 PM Friday
January 22, 2016 unless extended by mutual agreement.
We trust the above is to your satisfaction. We are ready to proceed immediately.
Respectfully yours,
CENTURY SERVICES CORP.
Per:
PriceWaterhouseCoopers Inc.,
in its capacity as Receiver
and not in its personal capacity
Per:
James Carlson
Senior Appraiser & Auctioneer
Western Canada
Sean Flemming
Senior Vice President, Consulting & Deals
oE1( KQo
GST Number
PLEASE SIGN AND RETURN -
IC/ag
Enclosure
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