CANADIAN MERGERS, ACQUISITIONS SET RECORD

The number of Canadian oil industry mergers and acquisitions hit a record high in the first quarter, said Sayers Securities Ltd., Calgary. There were 222 transactions in the quarter compared with 174 in fourth quarter 1990. Sayer's survey of 86 entities found that 56% of them were selling assets of companies.

May 13, 1991

2 min read

The number of Canadian oil industry mergers and acquisitions hit a record high in the first quarter, said Sayers Securities Ltd., Calgary.

There were 222 transactions in the quarter compared with 174 in fourth quarter 1990. Sayer's survey of 86 entities found that 56% of them were selling assets of companies.

Total value of transactions in the quarter was $910 million (Canadian). Of those, there were 15 transactions of more than $5 million each for a total of $610 million. The biggest was an agreement covering Shell Canada Ltd.'s acquisition of Gulf Canada Resources Ltd.'s working interest in Caroline natural gas field for more than $100 million.

Corporate acquisitions also remained at a high level, accounting for five of the 15 large transactions. Most notable, said Sayer, were Poco Petroleums Ltd.'s acquisition of 32% of Voyager Energy Inc. for $43 million and Inverness Petroleum Ltd.'s acquisition of 44% of Pancontinental Oil Ltd. for $24.3 million.

GULF WAR NO EFFECT

The Persian Gulf war had no effect on acquisition prices for oil and gas reserves, Sayer said. Typical of acquisition costs was the purchase by a joint venture of Chauvco Resources Ltd. and Tripet Resources Ltd. of Alberta properties from Esso Resources Canada Ltd. for $5.30/bbl of oil equivalent.

The amount of properties and companies available for sale at the end of the first quarter totaled $3.6 billion. That compares with $4.1 billion for sale at yearend 1990, a decline reflecting the success of such big companies as Esso and Amoco Canada Petroleum Co. Ltd. in disposing of assets, Sayer said.