“The system is massively cashed up and these producers are going to use their cash to buy assets,” he said. With global energy prices escalating, it’s been tricky for the bidders and sellers to agree on valuations and strike deals, said analyst Phil Skolnick with Eight Capital. “But this shows there are still willing buyers,” he said.Īs the industry pumps out record amounts of cash and higher profits, expect to see more consolidation take place this year, predicted Rafi Tahmazian, a senior portfolio manager at Canoe Financial. It’s pushed the total value of Canadian industry M&A to an estimated $4.5 billion, down from $11.1 billion in the first half of 2021.Įarlier this month, Cenovus Energy agreed to buy BP’s stake in the Sunrise oilsands assets for $600 million in cash - and a contingent variable payment of up to $600 million - while Vermilion Energy announced in March it would buy Leucrotta Exploration for $530 million. Article contentĪccording to data from Sayer Energy Advisors, the XTO deal is the largest acquisition of the year. This advertisement has not loaded yet, but your article continues below. Those that have good inventories of opportunities into the future should be rewarded.”Īs oil and gas prices have surged this year following Russia’s invasion of Ukraine, merger and acquisition activity in the Canadian oilpatch has been relatively quiet, although it’s picked up steam recently. “I believe so strongly that energy is going to be needed, utilized, from an energy security perspective … moving forward. XTO Canada was not spending money on their conventional assets in Canada,” Fagerheim said Wednesday in an interview. “These types - we’ll call them once-in-a-lifetime opportunities - don’t come along (often). It also marks the company’s fifth major purchase since the pandemic began, a “truly transformational acquisition” with long-life assets, said CEO Grant Fagerheim. The takeover gives Whitecap, an intermediate-sized petroleum producer, a significant footprint in the prolific Duvernay and Montney plays, to go along with its core oil assets in Saskatchewan and Alberta. The next issue of Calgary Herald Headline News will soon be in your inbox. If you don't see it, please check your junk folder. Manage Print Subscription / Tax ReceiptĪ welcome email is on its way.
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