The Canadian oil and gas sector is witnessing a surge of major deals that indicate a boom in the sector, according to some industry analysts.
Several multi-billion-dollar transactions have been announced since the beginning of 2023, involving some of the biggest players in the country’s energy landscape.
According to the president of Sayer Energy Advisors, Tom Pavic, Canadians should expect more in the coming year.
“I think you’ll still see some more consolidation, for sure. I think there’s still going to be some more transactions,” Pavic told the Canadian Press.
“A number of companies have the capital to pursue these transactions — they’ve been generating quite a bit of cash flow.”
These include Crescent Point Energy Corp.’s acquisition of Spartan Delta Corp.’s Montney assets for $1.7 billion, ConocoPhillips’ takeover of TotalEnergies’ Surmont oilsands project for about $4 billion, and Suncor Energy Inc.’s purchase of Total’s share in the Fort Hills oilsands mine for $1.47 billion.
On Monday, another blockbuster deal was unveiled, as Tourmaline Oil Corp. — one of Canada’s largest natural gas companies — agreed to buy Bonavista Energy Corp. for $1.45 billion.
In addition, Strathcona Resources Ltd. and Pipestone Energy Corp. merged.
In the U.S., Exxon Mobil Corp. made a splash with its US$59.5 billion bid for Pioneer Natural Resources, a move seen as a vote of confidence in the oil and gas sector.
The flurry of activity in Canada comes after two years of robust commodity prices in the sector.
As a result, many firms have reduced their debt levels and are now looking for opportunities to expand their production and reserves through acquisitions.
A recent ruling by the Supreme Court of Canada found that the federal government’s Impact Assessment Act (IAA), also known as the “No More Pipelines” bill was mostly unconstitutional.
The IAA, which was introduced in 2019 by the Trudeau government as Bill C-69, granted authority to federal regulators to assess the possible environmental and social effects of various resource and infrastructure projects, especially those involving pipelines. Critics of the law claimed that it essentially was an outright ban on any new energy development projects in Canada.
