• 5 minutes Global Economy-Bad Days Are coming
  • 8 minutes IT IS FINISHED. OPEC Victorious
  • 14 minutes Venezuela continues to sink in misery
  • 17 minutes Could Tesla Buy GM?
  • 1 hour Paris Is Burning Over Climate Change Taxes -- Is America Next?
  • 6 hours OPEC Cuts Deep to Save Cartel
  • 6 hours Rage Without Proof: Maduro Accuses U.S. Official Of Plotting Venezuela Invasion
  • 9 hours U.S. Senate Advances Resolution To End Military Support For Saudis In Yemen
  • 2 hours How High Can Oil Prices Rise? (Part 2 of my previous thread)
  • 18 hours Price Decline in Chinese Solar Panels
  • 4 hours What will the future hold for nations dependent on high oil prices.
  • 2 hours Sleeping Hydrocarbon Giant
  • 2 hours USGS Announces Largest Continuous Oil Assessment in Texas and New Mexico
  • 7 hours And the War on LNG is Now On
  • 5 hours Air-to-Fuels Energy and Cost Calculation
  • 19 hours Rigs Down
What Would A New OPEC Look Like?

What Would A New OPEC Look Like?

The global oil markets could…

Saudi Arabia Under Fire From All Sides

Saudi Arabia Under Fire From All Sides

Things are not going too…

Canadian Oil Firms On US$7.7B Spending Spree

Canada

Canadian oil and gas companies agreed to or proposed deals worth more than US$7.7 billion (C$10 billion) just in the past week and a half, tempted by lower price valuations for Canadian oil firms despite the risk of drawing shareholder anger with spending.

Last week, Husky Energy launched an unsolicited US$5 billion (C$6.4 billion) bid to acquire MEG Energy.

“We are committed to realizing this opportunity and strongly believe the Offer is in the best interests of Husky and MEG shareholders, as well as our respective employees and other stakeholders,” Husky Energy said upon announcing the offer.

Husky’s shares, however, dropped 3 percent after announcing the hostile bid, Canada’s Financial Post reports.  

Again last week, Precision Drilling Corporation said that it was buying Trinidad Drilling in an all-share deal valued at US$788 million (C$1.028 billion), including assuming Trinidad Drilling’s debt. Precision Drilling emerged as a white knight for Trinidad Drilling, which had rejected a hostile offer from Ensign. Precision Drilling’s offer is a 25-percent premium to the hostile offer from Ensign, Trinidad Drilling said.

The M&A spree continued this week, with International Petroleum Corp buying BlackPearl Resources in a deal valued at US$1.36 billion, and Parkland Fuel Corporation buying 75 percent of SOL, the largest independent fuel marketer in the Caribbean, for US$1.21 billion.

“When we looked at the business, it fit very well with ours,” Parkland president and CEO Bob Espey told Financial Post in an interview.

Related: Will Big Oil Ever Win Back Investors’ Trust?

According to analysts, it’s difficult to do deals in the current M&A environment in Canada and even at the low valuations of the companies, there are risks.

“It just seems like we’re in the kind of environment where you stick your head up above the trenches and it gets shot off,” Financial Post quoted Michael Freeborn, CIBC World Markets director and head of energy investment banking, as saying at a conference this week.

Dave Harrison, JP Morgan managing director, head of Canadian natural resources, believes that companies should not surprise investors with acquisitions not fitting their asset base.  

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News