Oil’s Slump Puts Canada Aquistions Streak on Ice

[Purveyor]

By Scott Deveau and Rebecca Penty Dec 8, 2014 10:30 AM ET

The rapid decline in global oil prices is setting the stage for a long dance between buyers and sellers in Canada’s energy industry.

The rout put a chill on an oil and gas acquisition market that saw about $39 billion of deals this year and is leading sellers like Penn West Petroleum Ltd. to consider waiting for a rebound. Highly indebted Canadian oil and natural gas producers may not be able to afford that luxury, and suiters such as Crescent Point Energy Corp. (CPG) Chief Executive Officer Scott Saxberg are circling for bargains.

“When oil was $100, there were companies that were struggling with their balance sheets and now oil is 60-some-odd dollars and they’re in trouble,” Saxberg said of the price for a barrel in an interview. “There will be a few of those companies that will disappear and have to be consolidated.”

Oil at a five-year low is making cash more scarce for producers that may have no choice but to sell assets or seek outright takeovers. The challenge will be finding investors willing and able to pay the price they want, Macquarie Group Ltd. (MQG) analyst Chris Feltin said.

“There’s going to be lots for sale and not a lot of buyers,” Feltin said by phone from Calgary. “Asset valuations might not be what the sellers would like to sell for but in this scenario there are few other options available.”

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http://www.bloomberg.com/news/2014-12-08/oil-s-slump-puts-canada-aquistions-streak-on-ice.html

[belzabubba333]

1. the saudi's plan working like a charm

[sadoldgirl]

2. I agree, but

why did the Saudis do it? Possibly a push from an ally?

[delrem]

3. It most certainly wasn't from the goodness of their (House of Saud) hearts.

But aside from that, recall that the Alberta tar sands projects were set in motion long before they were ever considered economically viable. This is big, big money - very long term investment. In fact the $$ are so big that the return isn't calculated in $$, it's calculated in terms of power and ownership of the Earth.