Deal value in Canada’s oil and gas sector decreased 60% in 2011 and deal volume dropped to 138 in 2011 from 202 the previous year, according to Ernst & Young figures released Monday.
“In 2011, continued economic uncertainty put a damper on transactions, partnerships and new business relationships in Canada’s oil and gas sector as companies went back to basics and focused on exploration and production,” said Kevan Holroyd, associate partner in Ernst & Young’s oil and gas practice.
But Holroyd said that this year, things are looking more favourable in the sector.
“Cash-rich companies with strong balance sheets, access to credit and a well-balanced capital agenda are hungry to execute on their growth strategies.”
Holroyd added that this year, companies looking to do deals in the sector are focusing on their longer-term vision, a well-thought-out partnering arrangement and “a seamless integration plan.”
According to Ernst & Young, companies will be able to make the most of 2012’s transaction opportunities in the sector by focusing on:
- developing a proactive opportunity-identification process;
- managing stragetic supplier and customer relationships;
- creating a plan to identify and retain or recruit key personnel; and
- aligning corporate culture between both parties.
