Resource World Magazine

j u n e / j u l y 2 0 1 4 www.resourceworld.com 57 GLOBAL continued from page 29 that follow both companies on both the junior and senior exchanges. Generally, the best place for a company to go public and raise capital is where most of its competi- tors and peers are listed. The company you keep, so to speak, puts you on the radar. This cluster effect suggests that bankers, advisors and analysts will pay attention to the companies, attract the right sort of investors and, ultimately, deliver the best valuation and the highest liquidity. The TSX and TSXV score highly in this respect, with more public oil & gas companies listed on the exchanges than on any other in the world. TWo TierS of inveSTmenT opporTuniTieS Many of the world's exchange groups restrict public listings to companies that have advanced beyond their early stages of development, and this trend is apparent in the energy sector. The two-tiered struc- ture of the TSX and TSXV challenges this convention and enables global investors to capture opportunities for growth earlier in a company's development. The TSXV provides emerging com- panies with access to a well-regulated marketplace for venture capital. The pub- lic venture market enables innovative oil & gas and energy services companies to attract financing as they proceed through the critical stages of their lifecycles. Exploration-stage oil & gas companies can grow on the TSXV and, as they develop and mature, junior energy companies have the potential to graduate to the TSX, the senior market. In fact, approximately 43% of oil & gas companies on the TSX are graduates of the TSXV. BuildinG TieS WiTh afriCa and laTin ameriCa Canada has strong commercial ties with African and Latin American countries, and the TSX and TSXV play an important role in growing these relationships. The exchanges provide companies operating in these regions with enhanced visibility and reach, while their shares trade in stable, liquid markets in which retail and insti- tutional investors understand the nature of their industry. There is optimism that investor sentiment is improving, particu- larly for African projects. There are currently 43 TSX- and TSXV- listed oil and gas companies with projects in Africa, and these companies raised nearly $790 million in equity capital in 2013. For Latin America, 36 oil & gas companies listed on the exchanges have projects in the region, and these compa- nies have raised $500 million in equity capital in the last two years. The TSX and TSXV hosted an Investor Day in New York City on May 1, 2014, which showcased leading oil & gas com- panies with assets in Africa and Latin America. Sponsored by PwC and the Oil Council, the event featured presentations from these companies as well as Kevan Cowan, President of TSX Markets and Group Head of Equities at TMX Group. General TrendS in oil & GaS CapiTal marKeTS in Canada • Increased interest in yield/dividends in 2013 but swinging back to higher risk in 2014 • Private equity filled the gap that sluggish capital markets created in 2013 • Appears to be thirst for international projects, increased investor comfort level, especially in Africa • Capital raising and M&A activity has increased in 2014 • Funds are flowing back into the oil & gas sector • Preference for oil-weighted E&P issuers • More room for midstream and oilfield services • Depressed capital market activity for juniors, although junior companies traded up approximately 17% in the last half of 2013 • A lot of consolidation, only 50% of juniors remain from 2007. (Unless noted otherwise, all stats are as of March 31, 2014.) The Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV) – Canada's major equities markets – are home to more oil and gas and energy services companies than any other global exchange group. Ranked first in the world by the number of listings in the energy sector, TSX and TSXV are the world's leading marketplaces for oil and gas companies to list and go public. n This document is provided for information purposes only. Neither TMX Group Limited nor any of its affiliated companies (collec- tively "TMX") guarantees the completeness of the information contained herein or in any of the materials we may reference. While we do our best to provide you with accurate and timely information, we are not responsible for any errors or omissions in, or your use of, or reliance on, the information in this docu- ment. Nothing in this document is intended to provide legal, accounting, tax, investment, financial or other advice and you should not be relying on it for such advice. None of the infor- mation provided is an invitation to purchase securities listed on Toronto Stock Exchange and/or TSX Venture Exchange. TMX does not endorse or recommend any securities ref- erenced in this document. ©2014 TSX Inc. All rights reserved. Do not sell or modify any of the content or materials in this document without TMX's prior written consent. Subscribe to reSourCe World at: www.resourceworld.com

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