June 6, 2019

Recent Transactions of Interest

Richard Eisenbraun Siwei Chen

Disclaimer: The contents of this presentation are for general discussion and analysis purposes only. They are not intended to constitute legaladvice. The information discussed herein have been disclosed on SEDAR or are otherwise a matter of public record. Nothing in respect of thispresentation shall constitute a waiver of privilege with respect to any legal advice provided in relation to the transactions set forth herein.

Presentation Outline

• Pieridae’s acquisition of Ikkuma

• Raging River’s business combination with Baytex

• Enbridge’s acquisition of Enbridge Income Fund Holdings

• Ensign’s acquisition of Trinidad Drilling

• Government of Canada’s acquisition of the Trans Mountain Pipeline Expansion Project from Kinder Morgan

Pieridae’s acquisition of IkkumaBackground

• Pieridae Energy Limited (“Pieridae”) is a Calgary-based, TSX-V listed corporation focused on integrated energy-related activities from the exploration and extraction of natural gas to the development, construction and operation of the Goldboro LNG facility and the production of LNG for sale to Europe and other markets. Pieridae has signed a 20-year sales agreement with Uniper, a German utility.

• Ikkuma Resources Corp. (“Ikkuma”) was a diversified growth-oriented TSX-V listed oil and gas company, with holdings in both conventional and unconventional projects in Western Canada. It held predominantly natural gas assets in the Alberta Foothills and Northeastern British Columbia.

• Pieridae proposed to acquire all of the shares of Ikkuma pursuant to a Plan of Arrangement.

• Certain Cardium light oil focused Alberta Foothills properties (“Exploration Assets”) were transferred to a new subsidiary of Ikkuma, Briko Energy Corp. (“Briko”), which was spun-out to Ikkuma’s shareholders as part of the Plan of Arrangement.

Ikkuma Resources

Corp.

Ikkuma Shareholders

Pieridae Energy Limited

Pieridae Shareholders

Exploration Assets Target Assets

Pieridae’s acquisition of IkkumaConveyance of Exploration Assets to Briko

• Prior to the Arrangement, the Exploration Assets were transferred to Briko in exchange for Briko Shares and an undertaking to issue to Ikkuma, immediately before the Effective Time, the Warrants referenced in Step 4 below.

• The stated value of the Exploration Assets was $12.5M, and the Circular discloses that Briko has approximately $12.5M of tax pools available (COGPE and CCA).

Plan of Arrangement

• Step 1 – Dissenting Shareholders were deemed to have sold their shares to Pieridae.

• Step 2 – Ikkuma stock options were terminated for no consideration.

• Step 3 – In the course of a reorganization of Ikkuma’s authorized and issued share capital, the Articles of Ikkuma were amended to add a class of shares designated as “Class A Shares” having attributes similar to the existing common shares.

• Step 4 – Each Ikkuma common share was exchanged for: (a) one Class A Share of Ikkuma; and (b) 0.1 of a Briko Share and 0.1 of a Briko Warrant (collectively, the “Briko Consideration”).

• Step 5 – Each Ikkuma Class A Share was transferred to Pieridae in exchange for 0.1926 of a Pieridae Share.

Ikkuma Resources

Corp.

Ikkuma Shareholders

Pieridae Energy Limited

Pieridae Shareholders

Exploration Assets

Target AssetsBriko Energy Corp.

Pieridae’s acquisition of IkkumaIkkuma Reorganization of Capital and Spin-Out

• Exchange of Ikkuma common shares for Class A Shares of Ikkuma and the Briko Consideration occurred pursuant to section 86 of the Income Tax Act (Canada) (the “Tax Act”). Subsection 84(4.1) is not applicable.

• No deemed dividend because paid-up capital (“PUC”) exceeded the fair market value (“FMV”) of the Briko Consideration (boot).

• Ikkuma Shareholders realized a capital gain if the FMV of the Briko Consideration exceeds adjusted cost base (“ACB”).

• The ACB of Briko Consideration to Ikkuma Shareholders is equal to FMV thereof. The ACB of Class A Shares of Ikkuma is ACB of common shares minus FMV of Briko Consideration.

Briko Energy Corp.

• Briko is a private corporation after the spin-out.

• Possible access to the lifetime capital gains exemption.

• Specified small business corporation for RRSP/TFSA purposes.

• Subsection 39(4) election is not applicable to Briko shares because their value is primarily attributable to Canadian resource property.

• Section 116 and more onerous taxable Canadian property rules will apply on a future sale of the Briko shares.

Briko Energy Corp.

Ikkuma Shareholders

Ikkuma Resources

Corp.

Exploration Assets Target Assets

New Class A Shares

Pieridae Energy Limited

Pieridae Shareholders

Pieridae’s acquisition of IkkumaShare-for-Share Exchange

• Exchange of Ikkuma Class A Shares for Pieridae Shares occurred pursuant to section 85.1 of the Tax Act. Automatic rollover for Ikkuma Shareholders, unless they report a gain or loss.

• ACB is averaged with other Pieridae shares held as capital property.

• Section 116 not applicable because Class A Shares were listed on a designated stock exchange (TSX-V).

Other Tax Implications

• Dissenting shareholders realize a capital gain or loss since their shares were deemed to be transferred to Pieridae under the Plan of Arrangement.

• Acquisition of control of Ikkuma.

Briko Energy Corp.

Former Ikkuma

Shareholders

Ikkuma Resources

Corp.

Exploration Assets

Target Assets

Pieridae Energy Limited

Pieridae Shareholders

Combination of Baytex and Raging RiverBackground

• Raging River Exploration Inc. (“RR”) was an oil and natural gas production company with operations in southwestern Saskatchewan and southeastern and central Alberta. Prior to the transaction, RR had more than $1.0B of Canadian tax pools.

• Baytex Energy Corp. (“Baytex”) was directly and indirectly engaged in the acquisition, development and production of crude and natural gas in the Western Canadian Sedimentary Basin and the Eagle Ford in the United States. Prior to the transaction, Baytex had more than $1.0B of Canadian tax pools and $1.5B of US tax pools.

• Batex and RR combined their businesses on August 22, 2018 pursuant to a Plan of Arrangement.

• After the business combination, RR Shareholders owned approximately 57% of the shares of Baytex.

• Transaction structured on a non-rollover basis, using 2099011 Alberta Ltd. (“RR Subco”). Presumably, most RR shareholders will realize a loss.

• A section 85.1 election option was provided to shareholders who (in summary): (a) did not hold their shares other than as capital property; (b) are not non-residents (unless RR shares are taxable Canadian property to the shareholder); and (c) are not tax-exempt (“Electing RR Shareholders”).

Raging River Exploration

Inc.

RR Shareholders

Baytex Energy Corp.

Baytex Shareholders

2099011 Alberta Ltd.

Combination of Baytex and Raging RiverPlan of Arrangement

• Step 1 – Dissenting RR shareholders transferred their RR shares to Baytex for FMV.

• Capital gain / loss to dissenting RR shareholders.

• Step 2 – Each RR share (other than Electing RR Shareholders and Deferred Plans) (“Non-Electing RR Shareholders”) transferred their shares to RR Subco in exchange for a promissory note issued by RR Subco (the “RR Subco Notes”).

• The RR Subco Notes were non-interest bearing promissory notes, payable on demand, each with a FMV equal to 1.36 Baytex Shares.

• Capital gain / loss to Non-Electing RR Shareholders.

• Corporate incest permitted temporarily under corporate law.

• Step 3 - Each RR Subco Note is transferred by Non-Electing RR Shareholders to Baytex in exchange for 1.36 Baytex Shares.

• No capital gain / loss to Non-Electing RR Shareholders.

• The full FMV of the RR Subco Notes are added to the stated capital of the Baytex Shares.

Raging River Exploration

Inc.

Other RR Shareholders

Baytex Energy Corp.

Baytex Shareholders

2099011 Alberta Ltd.

Non-Electing RR Shareholders

RR Subco Notes

Raging River Exploration

Inc.

Other RR Shareholders

Baytex Energy Corp.

Baytex Shareholders

2099011 Alberta Ltd.

Non-Electing RR Shareholders

RR Subco Notes

Combination of Baytex and Raging RiverPlan of Arrangement

• Step 4 - Each RR share held by an Electing RR Shareholder and a Deferred Plan is transferred to Baytex in exchange for 1.36 Baytex Shares.

• Automatic rollover under section 85.1 for Electing RR Shareholders. No section 85 election option offered.

• The aggregate PUC of those RR shares is added to the stated capital of the Baytex Shares.

• Step 5 – Each RR Subco Share held by RR is transferred to Baytex for cash consideration of $100.

• Step 6 – Baytex is a successor under the RR award and option plans.

Raging River Exploration

Inc.Baytex Energy

Corp.

Baytex Shareholders

2099011 Alberta Ltd.

Former RR Shareholders

RR Subco Notes

Raging River Exploration

Inc.Baytex Energy

Corp.

Baytex Shareholders

2099011 Alberta Ltd.

Former RR Shareholders

RR Subco Notes

Enbridge acquisition of ENFBackground

• Enbridge Inc. (“Enbridge”) is a North American infrastructure company with strategic business platforms that include an extensive network of crude oil, liquids and natural gas pipelines, regulated natural gas distribution utilities and renewable power generation assets.

• Enbridge Income Fund Holdings Inc. (“ENF”) is a subsidiary of Enbridge which indirectly held a portfolio of Canadian liquids transportation and storage businesses, including the Canadian Mainline, the Regional Oil Sands System, the Canadian segment of the Southern Lights Pipeline, an interest in the US portion of the Southern Lights Pipeline, a 50% interest in the Alliance Pipeline and more than 1,400 megawatts of renewable and alternative power generation assets.

Deal Structure

• Enbridge owned approximately 19.9% of the issued and outstanding common shares of ENF, and a special voting share in the capital of ENF.

• Enbridge acquired each ENF share for: (a) 0.7350 Enbridge shares (“Share Consideration”); and (b) at least $0.45 (which could be increased by an amount depending on dividend payments before closing) (“Cash Consideration”). ENF became a wholly-owned subsidiary.

• Enbridge also entered into agreements to acquire securities it did not already own in Spectra Energy Partners, LP; Enbridge Energy Management, L.L.C.; and Enbridge Energy Partners L.P.

Enbridge Inc.

EnbridgeShareholders

Enbridge Income Fund Holdings Inc.

ENF Shareholders

19.9% +1 Special Voting

Share

80.1%

Enbridge acquisition of ENFPlan of Arrangement

• Step 1 – ENF Shareholder Rights Plan was terminated.

• Step 2 – ENF shares held by dissenting shareholders were transferred to Enbridge for a debt claim against Enbridge equal to the fair value of their shares.

• Capital gain / loss for dissenting shareholders.

• Step 3 – ENF shares held by shareholders who were resident in Canada, not exempt from tax and not partnerships who elected in their Letter of Transmittal to transfer all (but not less than all) of their ENF shares to Enbridge in consideration for the Cash Consideration and Enbridge Shares (“ENF Electing Shareholders”) transferred their shares to Enbridge.

• Plan of Arrangement allowed ENF Electing Shareholders to file a section 85 election if desired. This would provide them with full deferral except to the extent the cash consideration exceeded their ACB.

• Tax instruction letter was sent to ENF Electing Shareholders providing general instructions on the Section 85 Elections.

Enbridge Inc.

EnbridgeShareholders

Enbridge Income Fund Holdings Inc.

ENF Shareholders

19.9% +1 Special Voting

Share

80.1%

Enbridge acquisition of ENFPlan of Arrangement

• Step 4 – Shareholders who were not dissenting shareholders or ENF Electing Shareholders (“Automatic Rollover Shareholders”) transferred a fraction of each ENF Share equal to the Cash Consideration per ENF Share to Enbridge in exchange for the Cash Consideration.

• Capital gain or loss on the fraction of the shares transferred for the Cash Consideration.

• Step 5 – Automatic Rollover Shareholders transferred their remaining fractional ENF Shares to Enbridge only in exchange for the Share Consideration.

• Automatic Rollover Shareholders generally received a rollover on the share-for-share component pursuant to section 85.1 of the Tax Act.

• No section 85 rollover elections, but existing ACB is split between cash and share consideration.

• Circular states that “it is not expected that the incremental gain that could be deferred by filing a Section 85 Election will be significant for most Resident Shareholders.”

• Bifurcation in Steps 4 and 5 should substantially reduce the number of Section 85 elections required.

Enbridge Inc.

EnbridgeShareholders

Enbridge Income Fund Holdings Inc.

ENF Shareholders

100%

Ensign acquisition of Trinidad DrillingBackground

• Trinidad – Trinidad Drilling Ltd. (“Trinidad”) was an oil and gas drilling contractor based in Calgary, with operations in Canada, the United States, Bahrain and the United Arab Emirates.

• Ensign – Ensign Energy Services Inc. (“Ensign”) provides oilfield services to the crude and natural gas industries in three main geographic operating regions: Canada, the United States and internationally.

Timeline

• Ensign Holdings Inc. (“Ensign Subco”) made a take-over bid to acquire all of the shares of Trinidad at $1.68/share.

• A competing offer was made by Precision, but ultimately Ensign Subco was able to purchase enough shares to conduct a squeeze-out amalgamation.

• Ensign held 9.8% of Trinidad’s shares prior to the take-over bid and 89.3% at the time of the amalgamation.

• Ensign needed control or direction over than 66 2/3% of the shares of Trinidad plus 50+1% of the “minority” to effect the squeeze-out. Shares acquired by Ensign Subco under the take-over bid can be counted in the “minority”.

Trinidad Drilling Ltd.

Trinidad Shareholders

Ensign Energy Services Inc.

EnsignShareholders

Ensign Holdings Inc.

*Entities excluded from diagrams for simplicity

Ensign acquisition of Trinidad DrillingSubsequent Acquisition Transaction

• Step 1 – Trinidad amalgamated with Ensign Subco to form Trinidad Drilling Ltd. (“Amalco”), in accordance with section 87 of the Tax Act.

• Each Trinidad share (other than those held by Ensign Subco or Dissenting Shareholders) was converted into a Series A preferred share of Amalco, redeemable for $1.68/share.

• Each Trinidad share held by Ensign Subco was cancelled.

• Each Ensign Subco share was converted into one Amalco Common Share.

• Each Trinidad share held by a Dissenting Shareholder was cancelled. Dissenting shareholders realized capital gains / losses in accordance with CRA administrative policy in Folio S4-F7-C1.

• Stated capital of Amalco shares was set at the PUC of both amalgamating corporations, less PUC of the Trinidad shares held by Ensign Subco which were cancelled on the amalgamation (with adjustments for dissenting shareholders).

• Stated capital was allocated first $1.68 per preferred share, with the balance to the Common Shares.

Trinidad Shareholders

Trinidad Drilling Ltd. (Amalco)

Redeemable Preferred Shares

Ensign Energy Services Inc.

EnsignShareholders

Ensign Drilling Inc.

Common Shares

Ensign acquisition of Trinidad DrillingSubsequent Acquisition Transaction

• Step 2 – The Series A preferred shares were immediately redeemed for $1.68 in cash.

• Automatic redemption was provided for in the Amalco share provisions.

• Short-lived preferred shares were necessary for the amalgamation to be a qualifying amalgamation under section 87 of the Tax Act. Long-standing CRA administrative policy permits immediate redemption of Amalco preferred shares.

• Disclosure states that holders of preferred shares realized a capital gain / loss on the share redemption.

Trinidad Drilling Ltd. (Amalco)

Ensign Energy Services Inc.

EnsignShareholders

Ensign Drilling Inc.

Trans Mountain PipelineThe Pipeline and Expansion Project

• The Trans Mountain Pipeline (“TMP”) is an existing pipeline that runs from Edmonton to Burnaby and has capacity to carry 300,000 barrels per day (bpd) of crude oil and refined products.

• The proposed TMP expansion would see another 590,000 bpd of capacity added.

• The TMP is currently the only pipeline system transporting crude to the West Coast.

Events Leading to Sale

• Project has been held back by various forces, including strong opposition from B.C. government, which stated it will “do whatever it takes to stop” the Project.

• April 8, 2018 – Kinder Morgan Canada Limited (“KM Canada”) issued a press release that would essentially kill the project if no agreement was reached by May 31.

• May 29, 2018 – Share Purchase Agreement (“SPA”) was signed, and the sale to the Government of Canada was announced.

Trans Mountain PipelineTransaction Structure

• Kinder Morgan Inc. (“KM US”), a publicly listed U.S. corporation, owned 70% of the Trans Mountain Pipeline LP (“LP”). KM Canada owned the remaining 30%. These interests were owned indirectly through various subsidiary entities. The Vendor entity was Kinder Morgan Cochin ULC (“ULC”).

• The assets sold were comprised of:

• All of the Equity Interests in the LP.

• All of the shares of Trans Mountain Pipeline ULC, which was the managing partner of the LP.

• All of the shares of Kinder Morgan Canada Inc., which employed various employees required for the development, construction and operation of the project.

• All of the membership interests in Trans Mountain Pipeline (Puget Sound) LLC, which owns certain interests in the U.S. portion of the pipeline system.

• The buyer was Trans Mountain Corporation (“TMC”), which was a wholly-owned subsidiary of the Canada Development Investment Corporation (“CDIC”). CDIC is a Crown corporation.

*Various entities excluded from diagrams for simplicity

Kinder Morgan Inc.

Kinder Morgan Canada Limited

Trans Mountain Pipeline L.P.

Public

Public

30%

70%

Restricted voting shares

Special voting shares

Kinder Morgan Cochin ULC

Trans Mountain PipelineShare Purchase Agreement (SPA)

• SPA contained representations regarding ACB and PUC of entities. It also contained a representation regarding the amount of tax that the ULC anticipated paying on the sale.

• Section 9.2(3) of the SPA provided an indemnity in favour of the Purchaser if Canadian federal and provincial taxes were less than $325M.

• Section 8.1(a) of the SPA provides that the LP will request a change of fiscal period of the LP to end immediately before the closing date, failing which the parties agreed to amend the Partnership Agreement to accomplish the same result.

• Section 6.3(6) of the SPA says that: “[t]he person who acquires the Target Entities shall not, on the Closing Date, be a person described in subsection 100(1.1) of the Income Tax Act (Canada) (“Tax Act”) and shall not, as part of a transaction or event or series of transactions or events that includes the Transactions, dispose of an interest in the LP to a person that is described in subsection 100(1.1).”

• The Closing Deliverables required evidence that TMC was a taxable entity.

*Various entities excluded from diagrams for simplicity

Trans Mountain Pipeline L.P.

Canada Development Investment Corporation

Her Majesty in Right of Canada

Trans Mountain Corporation

*Various entities excluded from diagrams for simplicity

$4.5B Cash

Kinder Morgan Inc.

Kinder Morgan Canada Limited

Public

Public

30%

70%

Restricted voting shares

Special voting shares

Kinder Morgan Cochin ULC

Trans Mountain Pipeline

• The Return of Capital reduces a shareholder’s ACB. Negative ACB triggers a capital gain. However, given the pricing of KMCL’s stock on its initial public offering and subsequent trading, it was anticipated that shareholders would not realize a capital gain.

• The amount by which the Reduction of Capital exceeds the Return of Capital ($0.25B) has no immediate tax consequences for KMCL’s shareholders, since such amount was not paid. However, it may impact future distributions since KM Canada will have less PUC.

Distribution of Capital by KMCL

• August 31, 2018 – Closing occurred. KM Canada’s portion of the proceeds was approximately $1.35B.

• September 4, 2018 – KM Canada’s board unanimously voted to distribute the net proceeds from the sale, after capital gains taxes, customary purchase price adjustments and repayment of debt, as a return of capital to shareholders.

• October 24, 2018 – KM Canada issued a Management Information Circular seeking a special resolution to approve a reduction of the stated capital of the restricted voting shares by an aggregate amount of $1.45B (the “Stated Capital Reduction”). The stated purposes of the Stated Capital Reduction were to: (a) distribute net proceeds from the sale ($1.2B) to shareholders (the “Return of Capital”); and (b) provide additional flexibility to pay dividends in the future, since dividends cannot be paid if assets do not exceed liabilities plus stated capital.

• An amount paid by a corporation on a reduction of capital by a public corporation is deemed to be a dividend under subsection 84(4.1) unless the amount may reasonably be considered to have been derived from proceeds of disposition realized by the corporation (or entity in which it owns an interest) from a transaction that occurred: (a) outside the ordinary course of the business of the corporation (or entity that realized the proceeds); and (b) within the period that commenced 24 months before the payment. KM Canada’s management concluded that this exception should apply to the Return of Capital.

Kinder Morgan Canada Limited

Public

$1.2B PaymentReturn of Capital

$1.45BStated Capital

Reduction

Richard EisenbraunP: 403.232.9648E: REisenbraun@blg.com

Siwei Chen P: 403.232.9556E: SChen@blg.com

Thank you