Fewer Canadian oil and gas companies are expected to go bust next year.
Mergers and acquisitions experts says that’s because many of the weaker companies have already failed or been sold. Higher oil and natural gas prices have also brought some measure of stability to the sector.
Calgary-based Sayer Energy Advisers says 26 Canadian energy companies have gone into receivership or restructuring so far this year. That’s up from 20 the year before. Typically, before the oil price plunge, the industry saw an annual average of eight company failures each year.
Sayer predicts more mergers and acquisitions in 2017 because buyers and sellers are becoming more closely aligned on how much assets are worth after two years of slumping commodity prices.
In the first nine months of this year, the industry saw $17.8 billion in oil and gas deals, up from $15 billion in all of 2015, but well short of the $49 billion recorded in 2014.