Desperation fuels Canadian M&A activity

Offloadings accelerate as many domestic oil firms struggle to stave off bankruptcy

M&A activity is picking up in the Canadian oil patch following a dearth of deals in the first half of the year, driven to some degree by the dire financial straits in which many of the country’s small to medium-sized oil and gas companies find themselves. Funding options, whether debt or equity, have largely dried up for these firms after a six-year downturn in Western Canada, culminating in the Covid-assisted oil price depression. In contrast, large producers—including oil sands heavyweights Suncor Energy and Canadian Natural Resources (CNRL)—continue to have no trouble tapping debt markets, and at reasonable rates. In an attempt to avoid bankruptcy, smaller Canadian oil and gas compan