Comprehensive Energy Data Intelligence
Information About Energy Companies, Their Assets, Market Deals, Industry Documents and More...
Why Canada's Oil Giants Are Skipping the Global M&A?
02/21/2024
- 27 M&A deals hit Canada's oil & gas in Q4 2023, worth $4.2bn.
- Biggest deal: Pembina's $2.3bn acquisition in the sector.
- Canadian oil firms watch as U.S. M&A surges.
- No major takeovers for Canada's mid-tier oil producers.
- Experts doubt Canada's oil majors will avoid M&A much longer.
The Canadian oil and gas sector announced 27 M&A deals in the last quarter of 2023, totaling $4.2 billion in value. The biggest deal of the quarter was Pembina Pipeline's $2.3 billion acquisition of several companies including Alliance Pipeline and Aux Sable Canada.
Compared to the previous quarter, the total value of M&A deals in Canada grew by 20% from $3.5 billion and jumped 95% compared to the same quarter the previous year. However, the number of deals dropped slightly by 4% from the previous quarter and was 23% less than the year before.
After a slowdown caused by the 2020 oil price crash, the U.S. oil and gas industry saw a huge increase in M&A activity in 2023. The industry capitalized on high stock prices to make $250 billion in acquisitions, mostly focusing on securing cost-effective reserves. The fourth quarter alone saw $144 billion in deals, with major companies like Exxon Mobil, Chevron, and Occidental Petroleum making significant acquisitions.
The U.S. saw a remarkable deal when Diamondback Energy agreed to buy Endeavor Energy Resources for $26 billion, despite Diamondback's market cap being only $31.8 billion. Following the announcement, Diamondback's stock rose by more than 10%, indicating a positive market reception.
In contrast, Canada's energy sector also experienced a surge, with M&A hitting a five-year peak at $70.4 billion, 56% higher than the previous year. Notably, while mid-tier Canadian producers like Tourmaline Oil and Peyto Exploration completed deals, the country's largest oil companies remained largely inactive in the M&A.
Experts Talking That …
It's becoming increasingly clear that Canada's oil giants may not sit out the ongoing wave of mergers and acquisitions (M&A) for much longer. These firms are facing the same pressures that are driving consolidation elsewhere, such as the push for bigger operations and more reserves. Notably, these companies are financially well-positioned. For instance, Canadian Natural Resources, the biggest in terms of market value, returned $6.1 billion to its shareholders in just the first nine months of 2023 and plans to give back 100% of its free cash flow to shareholders this year.
Given their strong financials, these Canadian energy leaders have the flexibility to engage in strategic M&As without cutting back on shareholder returns. They could take a cue from Diamondback Energy, which reduced its shareholder payouts from over 75% to 50%, enabling it to free up cash for acquiring Endeavor Energy. Additionally, with their stock prices having risen significantly in the past few years, these Canadian majors are well-equipped to use their shares as currency for mergers, just as their U.S. counterparts have done.
Trans Mountain (TMX) Pipeline and Its Role
The Trans Mountain (TMX) pipeline, crucial for Canadian oil exports, is starting to fill with crude this month, a major step towards its operation. The majority of the pipeline, capable of handling 890,000 barrels per day, will be filled by March, a process taking 2-3 weeks. The inaugural shipment from the pipeline is scheduled for April in Vancouver.
Now 98% complete, the pipeline's expansion is set to triple its capacity, significantly altering oil distribution in the Americas and boosting exports to Asia. This increase is expected to encourage more Canadian oil production. Despite being planned over a decade ago, the project's costs have surged to nearly $31 billion, four times the original estimate.
If you are looking for more information about energy companies, their assets, and energy deals, please, contact our sales office mapping@hartenergy.com, Tel. 619-349-4970 or SCHEDULE A DEMO to learn how Rextag can help you leverage energy data for your business.
Pembina (PBA) to Acquire Enbridge's Joint Ventures for $2.3 Billion - C$3.1 Billion
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/211Blog_Enbridge divests Alliance Pipeline and Aux Sable interests for 2.3B.png)
Pembina Pipeline Corporation PBA, a well-known player in the Canadian midstream sector, recently announced its plan to acquire Enbridge Inc.'s remaining shares in the Alliance Pipeline, Aux Sable pipelines, and NRGreen joint ventures. The deal, valued at C$3.1 billion or US$2.3 billion, marks a key step for Pembina in asserting its leadership in North America's natural gas transportation sector. This strategic acquisition is expected to considerably boost Pembina's growth and profitability in the coming years.
Chevron to Sell Stake in Canada’s Duvernay Shale
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/227Blog_Chevron to Sell Canadian Shale Stake.png){kind=icon}
Chevron is selling its Canadian shale production operations as part of a wider plan to concentrate its investments on more profitable projects in the United States.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/328_Blog_Why Are Oil Giants Backing Away from Green Energy Exxon Mobil, BP, Shell and more .jpg)
As world leaders gather at the COP29 climate summit, a surprising trend is emerging: some of the biggest oil companies are scaling back their renewable energy efforts. Why? The answer is simple—profits. Fossil fuels deliver higher returns than renewables, reshaping priorities across the energy industry.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/327_Blog_Oil Market Outlook A Year of Growth but Slower Than Before.jpg)
The global oil market is full of potential but also fraught with challenges. Demand and production are climbing to impressive levels, yet prices remain surprisingly low. What’s driving these mixed signals, and what role does the U.S. play?
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/326_Blog_USA Estimated Annual Rail CO2 Emissions 2035.jpg)
Shell overturned a landmark court order demanding it cut emissions by nearly half. Is this a victory for Big Oil or just a delay in the climate accountability movement?