Competition preserved in the supply of oil and gas reserves software in Canada

From: Competition Bureau Canada

News release

August 20, 2019 – OTTAWA, ON – Competition Bureau

Today, the Competition Bureau reached an agreement with Thoma Bravo to address competition concerns related to its recent acquisition of Aucerna.

Following an investigation, the Bureau found that the transaction, which closed on May 13, 2019, resulted in a merger to monopoly in the supply of oil and gas reserves valuation and reporting software to medium and large producers in Canada.

On June 14, 2019, the Bureau challenged the acquisition by filing an application with the Competition Tribunal. In that application, the Bureau sought an order requiring Thoma Bravo to sell either MOSAIC or Value Navigator, which are the reserves software products owned by its portfolio companies Quorum and Aucerna.

Under the terms of a consent agreement registered with the Competition Tribunal, Thoma Bravo agreed to sell Quorum’s MOSAIC business to a purchaser acceptable to the Commissioner. The Commissioner is satisfied that this agreement will preserve competition in the market for reserves software in Canada.

For more information on the Bureau’s investigation and findings, please consult its position statement.

Quotes

“I am pleased that our enforcement action in this matter has resulted in a settlement that will preserve competition in the supply of oil and gas reserves software in Canada. Without enforcement action, the merger would have resulted in a monopoly, leading to a substantial lessening of competition - resulting in higher prices and a lower quality of service for customers in Canada. Protecting the competitive forces that drive innovation in our economy is of the utmost importance to the Bureau.”

Matthew Boswell
Commissioner of Competition 

Quick facts

  • Reserves software monitors, evaluates and generates reports related to estimated reserves of oil and gas wells. This provides oil and gas producers with key information that is central to strategic decision-making and compliance with regulatory requirements.

  • Thoma Bravo is an American private equity investment firm with head offices in San Francisco, California.

  • Aucerna, now owned by Thoma Bravo, is a Calgary-based company that provides oil and gas software solutions in Canada and other jurisdictions, including the provision of reserves software in Canada through Val Nav.

  • Quorum, another Thoma Bravo portfolio company based in Houston, Texas also provides oil and gas software solutions in Canada and abroad through MOSAIC.

  • Prior to the acquisition, MOSAIC and Val Nav were each other’s only effective competitors. The Bureau determined that the loss in competition between them was likely to significantly reduce the incentive to maintain and enhance these reserves software.

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