More consolidation expected from oil and gas producers
As the fourth-quarter results roll out among Canada’s oil and gas producers, The Canadian Press—whose story was picked up by several media outlets including CBC—said the industry is anticipated to maintain its spending discipline thanks to the COVID-19 pandemic and other market factors, including U.S. president Joe Biden killing the Keystone XL project in his first week in office.
As a result of these and other circumstances, Torys Calgary partner Peter Danner expects to see an increase in queries coming from clients in the sector as they look to mitigate potential future losses and recalibrate their businesses.
“Companies are seeking scale to remain relevant and a lot of these transactions, too, are driven by cleaning up balance sheets and some by rebalancing of asset mix, moving more toward natural gas in line with long term trends people are seeing,” Peter told The Canadian Press.
Larger consolidations will further spawn smaller transactions as buyers put non-core assets on the market after the deals are closed, he added.