Consolidation in Canada's oil and gas industry

Canada’s oil and gas industry is seeing more M&A activity in years months than it has in a long time. Calgary partner Janan Paskaran sat down with The Globe and Mail to discuss this uptick in dealmaking.

“Right now, we are seeing the big guys take out others but not as much yet of the smaller-sized companies doing deals to merge to get big enough to be interesting to buyers,” Janan said.

“Those mid-cap players and the stress they are under to do something—I’m not sure investors are going to let them stay and just coast.”

Janan continued, noting that many companies have increased their dividends and reduced their debt. However, investors are eager to know what’s next.

Read: Q4 Torys Quarterly: The renewable Alberta advantage: rising investment in energy transition

Even as the number of oil and gas companies in Alberta decrease over the years, Janan explained that there are additional forms of resistance to consolidation that could stifle the pace of dealmaking.

“There is still complacency and there is no doubt still some management entrenchment,” he said.

“Everybody thinks there should be consolidation, but everybody also thinks they should be the ones that survive the consolidation.”

You can read more about our M&A work on our practice page.

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