CALGARY — A wave of high-profile mergers and acquisitions in the Canadian oilpatch is a sign of an industry that is flush with cash and increasingly confident in the short- and medium-term outlook for fossil fuels, experts say.
According to figures from Calgary-based Sayer Energy Advisors, M&A activity in the Canadian energy sector has totalled $12.7 billion since the start of 2023. While that's less than the $15.2 billion and $17.9 billion the sector saw in 2022 and 2021, respectively, it is occurring at a time when the Canadian oilpatch has now benefited from two years of strong commodity prices.
"Now what I think we're seeing are signs of strength. These companies have excellent balance sheets and the capacity to go and acquire and strengthen their empires." " is the best-performing sector, and I think investors are looking for ways to get back into energy," she said.Still, Exner-Pirot pointed out that Canada's energy sector has far fewer players now than it did prior to the oil price crash of 2015, an industry-shaking event that drove another major wave of consolidation. She said the fact that so much consolidation has already occurred naturally limits the amount of deal-making that can take place now.
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