Prairie Provident: Prudential applies, and every director is deemed resigned

On October 27, 2026, Associate Chief Justice Nixon of the Court of King's Bench of Alberta, sitting in Calgary by Web-Ex, granted a CCAA initial order over Prairie Provident Resources Inc., a Calgary oil and gas producer listed on the Toronto Stock Exchange, and its operating subsidiary, Prairie Provident Resources Canada Ltd. The applicant was their senior secured lender, The Prudential Insurance Company of America and Prudential Legacy Insurance Company of New Jersey. Under the order, the companies' "directors, officers, management and any employees of the Companies shall cease to have any power, authority or ability to direct or control the Companies, the Property, or the Business," though the employees' employment continues, and each director and officer of the two companies and four subsidiaries is deemed to have resigned as of 11:00 a.m. Mountain Time that day, per the Initial Order, Oct. 27, 2026, paras. 5, 46 and the Originating Application, paras. 1, 4, 6–7.

The powers go to Alvarez & Marsal Canada Inc., appointed monitor and "empowered and authorized, but not obligated," among other things to take possession of and control the property, to "manage, operate and carry on the Business of the Companies," to control the companies' bank accounts, to terminate or lay off employees, and to sell property outside the ordinary course without court approval in transactions of up to $250,000 each and $1,000,000 in all. When it exercises those powers it is "the sole Person authorized to exercise such powers, to the exclusion of all other Persons, including the Companies," per the Initial Order, Oct. 27, 2026, paras. 18(j), (l), (v), (cc), (ff), 19.

Michichi and Princess

The companies' principal operating areas are Michichi, in the Drumheller area, and Princess, in the Brooks area, and management estimates an average working interest of about 70% across their asset base; they also carry regulatory obligations in British Columbia, Saskatchewan and the Northwest Territories. Production averaged 2,367 boe/d in 2025, 1,380 of it at Michichi and 593 at Princess, and 2,178 boe/d in the first half of 2026. At the end of 2025 the companies had, on a gross basis, 462 oil wells, 164 of them producing, and 369 natural gas wells, 168 producing. As of August 2026 they had approximately nine full-time employees, 21 head-office contractors and 14 field-level contractors, per the Pre-Filing Report, Oct. 26, 2026, paras. 23–24, 26–28.

One group, from the first lien to the common shares

The supporting affidavit is sworn by a managing director at PGIM, Inc. who has headed a corporate and project workouts group since January 2022 and has been involved in the Prairie Provident lending relationship since about September 2020. By its estimate the two insurers are owed CAD $71,264,618 of senior secured debt under a note purchase agreement of October 31, 2017, which began as a US$40,000,000 revolving facility and was raised to US$65,000,000 in November 2018, secured by demand debentures from both companies, per the Supporting affidavit, Oct. 23, 2026, paras. 1, 4–5, 18, 22, 28–31.

Three other positions in the structure are held by entities the pre-filing report describes as the lender's affiliates. Approximately 80.1% of the parent's shares are owned or controlled by PCEP Canadian Holdco, LLC, which is owned by Prudential Capital Energy Partners, L.P. and Prudential Capital Energy Partners Management Fund, L.P., the partnerships the affidavit calls the Subordinate Lender. Under the second lien agreement, which began with US$3,640,500 of notes issued in March 2023 to the first of those partnerships, "an entity managed by PPRI's ultimate parent, PGIM," the outstanding principal was approximately CAD $11,537,000 at June 30, 2026. And in October 2025 the operating company raised about US$16,000,000 by issuing preferred shares to PPR Canadian Pref Holdco, LLC, "an entity associated with PCEP," with an aggregate principal amount of CAD $27,890,000 at June 30, per the Supporting affidavit, Oct. 23, 2026, paras. 10, 46, 49, 59, 69 and the Pre-Filing Report, Oct. 26, 2026, para. 37.

"PCEP, the Subordinate Lender, and Prudential Senior are part of the same corporate group," the deponent swore. "I consider them to be related or affiliated entities." The company's 2025 annual information form adds that under an investor rights agreement from the 2023 recapitalization, PCEP has the right to nominate or have appointed a majority of the board, and its second-quarter MD&A describes the first lien as a facility "with the Company's ultimate parent," per the Supporting affidavit, Oct. 23, 2026, para. 11, Ex. "3" (AIF), p. 10 and Ex. "1" (MD&A), p. 12.

The June 30 statements also carry decommissioning liabilities of CAD $68,309,000, estimated at approximately CAD $111,700,000 undiscounted and uninflated, and put total assets at approximately $117.5 million against liabilities of approximately $179.1 million, per the Supporting affidavit, Oct. 23, 2026, para. 50 and the Pre-Filing Report, Oct. 26, 2026, paras. 31–32.

Two wells at Michichi

The account of the decline is sworn by the lender's deponent, drawn partly from the companies' public disclosure. The deponent calls 2018, the year of the Marquee acquisition, "a key inflection point": the deal "increased leverage without generating the anticipated production and earnings contribution." Prudential worked with the companies to restructure the debt in December 2020. The 2023 recapitalization compromised approximately CAD $72,000,000 of senior subordinated debt, owed to the Subordinate Lender, through forgiveness and conversion to equity, and gave PCEP its majority. CAD $20,000,000 of the proceeds of the Evi and Provost sales in early 2024 went to pay down the senior debt. Prudential waived defaults arising from missed interest payments for February, May, June, July and August 2024, let the companies capitalize interest from September 13, 2024, and granted two more limited waivers in 2025, over their inability to deliver financial statements without a going-concern qualification and to meet the minimum EBITDAX requirement, per the Supporting affidavit, Oct. 23, 2026, paras. 8, 34, 52–58 and the Pre-Filing Report, Oct. 26, 2026, para. 42(a)–(c).

The October 2025 preferred-share money was to fund a development plan meant to raise production and revenue enough to service and repay the secured debt. Three wells were drilled at the end of 2025 and the beginning of 2026. "Two of those wells experienced a casing failure and were deemed unsalvageable," the affidavit says. The AER had mandated that they be abandoned by October 15, 2026, and the companies had asked for an extension to January 15, 2027, per the Supporting affidavit, Oct. 23, 2026, paras. 60–61.

The company's news release of January 7, 2026, attached to the affidavit, says the two Michichi wells, one-mile Basal Quartz horizontals off one surface pad, "encountered high quality Basal Quartz reservoir as evidenced by the geological strip logs. However, production casing failures occurred during the primary cementing operations at both wells. Downhole camera visualizations show casing shearing/deformation at similar depths on a casing collar." The company, still investigating, believed these were separate events "that may have been caused by an oblique slip in a system of critically stressed sub-seismic faults triggered by geo-mechanical factors," per the Supporting affidavit, Oct. 23, 2026, Ex. "24".