March 13, 2017
On March 9, we released our Canadian Oil & Gas 2017 Outlook that has since been spotlighted in an article by Advisor.ca. In support of an earlier February predication of increased M&A activity in Canada for 2017, the article draws on key surveys from our report summarizing several important evolving aspects of the oil and gas industry including, investor confidence, foreign cross-border investments, senior and junior E&P, the price of oil and gas and current industry concerns such as agreements with Indigenous people and carbon pricing. Below is an excerpt of the article.
Oil and gas sector set for more M&A activity
[…] a new study puts the spotlight on the oil and gas industry. Executives and bankers in that industry expect a robust year for M&A activity, finds a survey by Torys LLP. It says more than half (67%) of respondents expect M&A volume to increase in 2017, and 54% expect the value of M&A to increase.
Investor confidence in the oil and gas industry has been bolstered by government support of projects such as the Keystone XL and Trans Mountain pipelines.
Energy buyers are expected from the U.S. (say 73% of respondents), the Asia-Pacific region (say 69%) and China (say 51%). Respondents say buyers will be enticed by buoyant oil prices and new technologies that boost efficiency.
Further, global demand is on the rise as Asian buyers look for a secure supply of oil and gas.
More than half of respondents (52%) expect senior exploration and production (E&P) companies to be the main buyers, while junior E&P companies struggle with debt and reduced cash flow.
Other factors to consider for oil and gas M&A activity include: agreements with Indigenous peoples in Canada, especially for infrastructure for exports and for liquefied natural gas (LNG) projects; and the effect of carbon pricing.
To read the full article, click here.
To read our Canadian Oil & Gas 2017 Outlook, click here.