Canada's Oil Patch Sees Biggest M&A Wave Since 2017
Canada's oil patch is experiencing its biggest merger and acquisition wave in nearly a decade, with over $30 billion in deals so far this year. This surge in M&A activity is driven by high oil prices and asset values, rather than a desperate attempt to dispose of distressed assets.
Raj Singh, CEO at Calgary-based Fuelled Inc., notes that the current dynamic is 'a healthier one' as companies merge from positions of strength, which tends to produce more durable combinations.
The year's key highlight was Shell's takeover of Arc Resources for $16.4 billion, a deal that added 370,000 barrels of oil equivalent per day (boe/d) to Shell's output and improved its projected annual production growth rate from 1% to roughly 4% through 2030.
Shell also secured the upstream gas needed to feed LNG Canada and paved the way for a Phase 2 expansion that could double the facility's size. The deal increased Shell's exposure to low-cost, long-duration liquids.