Increasing volatility in oil prices in the months following Russia’s invasion of Ukraine in early 2022 made it difficult for oilpatch buyers and sellers to agree on a price, according to Reuters, citing data from Sayer Energy Advisors that indicates that Canadian upstream deals totalled $15.6 billion in 2022, down 14 per cent from the previous year.
Despite the recent volatility, however, there are indications the Canadian oilpatch could see more M&A activity over the next few months. The executives of nearly 50 Canadian exploration and production companies said they believe there will be at least two or more public transactions over the next six months involving Canadian companies, according to a semi-annual survey by Jeremy McCrea of Raymond James Financial Inc., an investment bank.
McCrea reported that 57 per cent of respondents indicated that their company was likely or highly likely to be involved with M&A activity over the next six months, up from previous surveys. “Given that balance sheets have improved, commodity prices have pulled back and become more stable, thus making it easier for acquisitions to occur ,” McCrea wrote in a March 27 research note.The deal is expected to add capacity of 38,000 barrels of oil equivalent per day from the Montney, one of the largest and most lucrative gas resources in North America.
In a release, Spartan said it will focus on developing its remaining Alberta Deep Basin assets and that it will spin off a portion of its remaining production to build a new growth-focused Montney junior company called Logan Energy Corp. with assets in Alberta and British Columbia.
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