RE:One small reason AAV has been lagging TOU? Not sure what you mean by lagging. aav has almost quadrupled from the time that deal was made.
Second, I don't think that deal was big enough to effect the trajectory of AAV. Notice when the deal was struck. In the scariest point of the pandemic, when many companies were making moves to shore up their finances just in case. It was an insurance policy.
I don't think there is Any risk whatsoever to that deal for either AAV or Topaz. At the time analysts either praised the deal, or were neutral. None thought it was a bad deal. Finally Tourmaline has sold many assets to TPZ, including interests in gas plants, and they are doing just fine.
The reason it tends to be a bad deal for most companies that sell an interest in a gas plant, or a gas plant in its entirety, is because it is often done as a last resort financing on poor terms. For example, Crew has sold interests in their gas plants to pay off debt. Paramount has sold plants to pay off debt.
I don't believe that to be the case for either AAV or TOU. It also depends what is done with the proceeds of the sale. In the case of TOU, the sales helped them buy producing assets at fire sale prices. In the case of AAV it helped them finance new liquids rich projects in the Alberta Montney.
Yasch22 wrote: It goes back to AAV's decision in April 2020 (deal closed in July) to sell a 12.5% interest in its Glacier processing facility to Topaz.
Total capacity of Glacier = 400 mmcf/d. The 12.5% sale = 50 mmcf/d.
Topaz (an arm of the TOU empire) paid $100m.
In return, AAV guaranteed payment of a processing fee of $0.66/mcf for 15 years.
That means AAV pays $12m per year for 15 years = $180m.
The deal was the equivalent of borrowing $100m at 12% flat-rate interest guaranteed for 15 years. Hence TerribleEng's comments a couple of days ago on the lunacy of Peyto doing something similar to this. Far better to maintain 100% control of your own processing.