Western Canada oil and gas producer count down by nearly 300 names since 2014

The loss of producer names is more stark among publicly traded issuers

Pumpjacks are shown pumping crude oil near Halkirk, Alta., on June 20, 2007. THE CANADIAN PRESS/Larry MacDougal

Pumpjacks are shown pumping crude oil near Halkirk, Alta., on June 20, 2007. THE CANADIAN PRESS/Larry MacDougal

A lack of capital for drilling coupled with rising exploration costs make it unsurprising that fewer players are operating in Western Canada’s oil and gas fields, analysts say.

A study from consulting firm XI Technologies of Calgary finds that almost 300 names have disappeared from a roster of all companies producing oil and gas in Western Canada since global oil prices began crashing at the end of 2014.

A total of 1,334 active companies — privately held and foreign-owned entities as well as publicly traded firms — reported oil or gas production in Western Canada in December 2018, XI found.

That’s down 282 names or 17.5 per cent from 1,616 in the same month four years earlier, a shift that XI data solutions specialist Shovik Sengupta says points to a period of significant consolidation in the industry.

READ MORE: U.S. and Canadian pipeline delays add appeal to creative options for oil transport, transformation

“There’s no capital,” said Tom Pavic, senior vice-president with Calgary-based Sayer Energy Advisors, when asked what he thinks is causing the shrinkage.

“There’s an uptick in oil prices but we’re not seeing it with the producers’ stock price on the exchange…. No one wants to touch Canada because of all the uncertainty as it relates to pipelines.”

Most of the missing names are likely to be small players who haven’t been able to win investor backing to pay for drilling expensive oil and gas wells in trendy unconventional resource oilfields like the Montney and Duvernay, added Sayer president Alan Tambosso.

The loss of producer names is more stark among publicly traded issuers.

As of Dec. 31, 2014, a total of 108 oil and gas companies with a market capitalization of $311 billion were listed on the Toronto Stock Exchange, while 229 smaller companies worth $5.1 billion resided on the TSX Venture Exchange.

Four years later, the number on the senior exchange had fallen by 31 per cent to 72 with a market cap of $214 billion, and venture listings were off by 44 per cent to 119 companies worth $3.9 billion.

The market for oil and gas corporate sales looked to be heating up last year but stalled on lower global oil prices over the summer and price discounts for western Canadian oil in the fall as production exceeded export pipeline capacity, said Stephanie Stimpson, a Calgary-based partner at law firm Torys LLP specializing in oil and gas mergers and acquisitions.

“It’s really is about the access to capital here,” she said.

“There are very few financings getting done. Certainly the junior sector is not able to raise capital now.”

She said recent transactions show even Canadian energy companies and pension funds often have a preference for putting their money in the United States oilpatch instead of investing at home.

Going forward, M&A activity will depend on investor confidence, she said, which could swing up or down based on whether the Trans Mountain pipeline expansion is re-approved for construction this spring, as well as other factors including results from the Alberta provincial election next week.

Sayer data shows total Canadian oil and gas M&A value in 2014 was $49.4 billion but it fell to $16 billion in 2015 and $12.1 billion last year.

XI says the consolidation of companies in Western Canada has resulted in a greater number of subsidiaries for many larger producers.

For example, it reports Calgary-based Canadian National Resources Ltd. — the largest listed producer in both 2014 and 2018 — doubled the number of subsidiary companies it operates in Western Canada from 77 to 135 over the four years, a period when it made numerous large and small acquisitions.

In spite of the acquisitions, XI reported CNRL production fell from about 741,000 barrels of oil equivalent per day in December 2014 to 618,000 boe/d in the same month of 2018.

Dan Healing, The Canadian Press

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Alberta Premier Jason Kenney said the Canadian government should consider sanctions on the U.S. if they refuse to reconsider the decision to cancel the Keystone XL Pipeline. (THE CANADIAN PRESS/Sean Kilpatrick
Keystone XL officially cancelled, Kenney vows to fight on

U.S. President Joe Biden cancelled the presidential permit for the pipeline on first day of office

Alberta’s chief medical officer of health Dr. Deena Hinshaw said province’s test positivity rate for COVID-19 is steadily declining. (Photo by Chris Schwarz/Government of Alberta)
669 new COVID-19 cases in Alberta, 21 additional deaths

COVID-19 test positivity rate down to 4.5 per cent

Black Press file photo
Leduc RCMP investigate shooting

Male victim transported to hospital with serious injuries.

Alberta’s Chief Medical Officer of Heath, Dr. Deena Hinshaw. Black Press file photo
 Alberta’s Chief Medical Officer of Heath, Dr. Deena Hinshaw. Black Press file photo
New COVID-19 death reported in the City of Wetaskiwin

COVID-19 updates for the City and County of Wetaskiwin.

Pictured left to right: Tyrone McDonald, Fire Chief Jamie Wilkinson, General Manager of Community & Protective Services Paul Edginton, Uwe Kurth (ASFA), City Manager Sue Howard, Deputy Fire Chief Alex Plant, Mayor Tyler Gandam. Photo/ City of Wetaskiwin.
City of Wetaskiwin Fire Services sends gear to firefighters in Paraguay

Former City of Wetaskiwin Fire Services member spearheading this initiative.

Kyla Gibson with her boyfriend Gavin Hardy. (Photo used with permission)
Sylvan Lake couple lose ‘fur babies’ to house fire

‘They were our world and nothing will ever replace them,’ Kyla Gibson said of her three pets

(Thesendboys/Instagram)
Video of man doing backflip off Vancouver bridge draws police condemnation

Group says in Instagram story that they ‘don’t do it for the clout’

Toronto’s Mass Vaccination Clinic is shown on Sunday January 17, 2021. THE CANADIAN PRESS/Frank Gunn
Canadian malls, conference centres, hotels offer up space for COVID vaccination centres

Commercial real estate association REALPAC said that a similar initiative was seeing success in the U.K.

Kamala Harris and Joe Biden are sworn into office on Wednesday, Jan. 20, 2021, at the U.S. Capitol in Washington, D.C. (Saul Loeb/Pool Photo via AP)
Joe Biden has been sworn in as the 46th president of the United States

About 25,000 National Guard members have been dispatched to Washington

A memorial for the fatal bus crash involving the Humboldt Broncos hockey team at the intersection of Highways 35 and 335 near Tisdale, Tuesday, October 27, 2020. THE CANADIAN PRESS/Liam Richards
‘End of the road:’ Truck driver in Humboldt Broncos crash awaits deportation decision

Sidhu was sentenced almost two years ago to eight years after pleading guilty to dangerous driving

In this March 28, 2017, file photo, a dump truck hauls coal at Contura Energy’s Eagle Butte Mine near Gillette, Wyo. Public opposition to the Alberta government’s plans to expand coal mining in the Rocky Mountains appears to be growing. THE CANADIAN PRESS/AP/Mead Gruver, File
Alberta cancels coal leases, pauses future sales, as opposition increases

New Democrat environment critic Marlin Schmidt welcomed the suspension

In this March 28, 2017, file photo, a dump truck hauls coal at Contura Energy’s Eagle Butte Mine near Gillette, Wyo. (THE CANADIAN PRESS/AP/Mead Gruver, File)
First Nations seek to intervene in court challenge of coal policy removal

Bearspaw, Ermineskin and Whitefish First Nations are among those looking to intervene

Prime Minister Justin Trudeau provides an update on the COVID-19 pandemic from Rideau Cottage in Ottawa on Tuesday, Jan. 11, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Prime Minister Justin Trudeau provides an update on the COVID-19 pandemic from Rideau Cottage in Ottawa on Tuesday, Jan. 11, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Trudeau vows to keep up the fight to sway U.S. on merits of Keystone XL pipeline

Canada’s pitch to the Biden team has framed Keystone XL as a more environmentally friendly project than original

Most Read