Signs of Optimism and Industry Resilience


The Canadian oil and gas sector is making waves in 2023, and it’s not just because of record production levels. The industry is currently riding a tide of high-profile mergers and acquisitions, reflecting its renewed confidence in the short- and medium-term outlook for fossil fuels. This blog delves into the billion-dollar deals that have made headlines and explores what they mean for Canada’s energy landscape.

The Mergers and Acquisitions Surge

Since the beginning of the year, the Canadian energy sector has witnessed a flurry of billion-dollar deals. Notable among these transactions are Crescent Point Energy Corp.’s $1.7-billion acquisition of Spartan Delta Corp.’s Montney oilfield assets, ConocoPhillips’ approximately $4-billion purchase of TotalEnergies’ Surmont oilsands project, and Suncor Energy Inc.’s $1.47-billion buyout of Total’s stake in the Fort Hills oilsands mine.

The latest headline-grabbing deal came from Tourmaline Oil Corp., Canada’s largest natural gas producer, which announced its intention to acquire privately held Bonavista Energy Corp. for $1.45 billion. Meanwhile, Strathcona Resources Ltd. merged with Pipestone Energy Corp. in an all-stock deal, creating the fifth largest oil producer in the country.

The Financial Landscape

According to Calgary-based Sayer Energy Advisors, mergers and acquisitions (M&A) activity in the Canadian energy sector has reached a staggering $12.7 billion since the start of 2023. While this is slightly lower than the M&A figures of $15.2 billion in 2022 and $17.9 billion in 2021, it’s occurring against the backdrop of two years of robust commodity prices.

The industry’s newfound financial strength is a crucial factor. Many companies have significantly reduced their debt and are now sitting on ample cash reserves, providing them with the financial muscle to pursue growth through strategic acquisitions.

Expert Opinions

Tom Pavic, President of Sayer Energy Advisors, anticipates more consolidation in the industry, given the substantial cash flow generated by many companies. This financial capability enables them to pursue these transactions and positions them for growth in the coming years.

Heather Exner-Pirot, Director of Energy, Natural Resources, and Environment for the Macdonald-Laurier Institute, notes that the deals of 2021 and those taking place now are distinct. While 2021’s consolidation was often driven by vulnerabilities due to the post-COVID environment, the current deals reflect strength. Companies involved in the latest acquisitions boast robust balance sheets and are well-positioned to strengthen their industry presence.

Global and Environmental Context

Beyond the Canadian borders, Exxon Mobil Corp.’s announcement of its US$59.5 billion acquisition of Pioneer Natural Resources underscores the global oil industry’s confidence in fossil fuels. This confidence remains despite the worldwide push for lower-carbon energy sources to combat climate change.

The global energy crisis triggered by Russia’s invasion of Ukraine has drawn investors back to the industry, as fossil fuels are expected to remain in high demand in the short and medium term.

(Oil and Gas) Industry’s Remarkable Performance

Oil and gas have emerged as the best-performing sector in the market. Investors are actively seeking opportunities to reenter the energy sector, highlighting a robust bullish sentiment.

Limitations of Consolidation

Despite the optimism and recent consolidation, the Canadian energy sector is not without constraints. The number of players in the industry has significantly diminished since the oil price crash of 2015, which led to a previous consolidation wave. The extensive acquisition activity in the past naturally limits the potential for massive new deals.

Heather Exner-Pirot underscores the importance of efficiency and cost-effectiveness in such consolidations. Many of these deals are driven by overlapping land assets and the potential to produce a cheaper barrel of oil. As the Canadian oilpatch experiences a diminishing scope for such efficiency gains, the likelihood of a wave of new deals is decreasing.


The wave of billion-dollar deals in the Canadian oilpatch is a testament to the sector’s resurgence and financial strength. While it reflects optimism in the fossil fuel industry, it also underscores the industry’s adaptability in a dynamic global market.

As the world navigates the energy transition and environmental commitments, the Canadian oil and gas sector continues to play a pivotal role in shaping the nation’s energy landscape. While further consolidation may be on the horizon, it’s essential to recognize that the industry’s future hinges on efficiency, sustainability, and its ability to respond to evolving global energy dynamics.