M&A activity in Canada’s upstream oil and gas sector remains slow in 2018

Following our update during the last quarter of 2016, M&A activity in Canada’s upstream oil and gas sector continued to decline in 2017 and has remained slow during the first quarter of 2018. Globally, there was a strong start to 2017 followed by a significant decline, in terms of both deal count and overall deal value, during the balance of 2017, with a notable increase in deal activity during the first quarter of 2018.  According to Deloitte’s Oil & Gas Mergers and Acquisitions Report–Yearend 2017, after the increase in deal spend in Q4 2016 and Q1 2017, the rest of 2017 saw a significant decline in upstream M&A spend. Deloitte noted the following themes that emerged during the year: (1) continued portfolio optimization as larger exploration and production (E&P) companies divested non-core acreage to reduce debt levels and focus on core locations and assets, (2) consolidation through larger-scale deals to combine portfolios, and (3) a…

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