Five trends set to characterize Canadian oil and gas transactions market in 2013

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(Calgary, 10 December 2012) Over the last year, Canadian oil and gas transactions have centred on increased interest from Asian investors and the high-profile deliberations by the Canadian government about the implications of foreign investment in Canada’s oil and gas industry.

But Canadian transactions will look different in the future — influenced by macro factors, including the growth of US unconventional oil and natural gas production, transportation and infrastructure constraints, increased environmental regulations, continued interest from Asian investors (both state-owned  enterprises and private investors), and new clarity on the rules governing foreign investment.

Ernst & Young’s new report, Canadian oil and gas: Transactions and trends 2012-13, points to the following trends companies can expect in 2013:

  1. Back to business basics: Companies are refocusing on cost reduction, performance improvement, capital allocation and targeted organic growth initiatives.

  2. Unconventionals have changed the energy dynamic: Shale gas, tight oil and the oilsands are influencing where companies deploy their capital.

  3. Technology is the name of the game: Technology now plays a critical role in accessing reserves in increasingly difficult and challenging geological formations.

  4. People are everything: National oil companies stand to benefit more from the business acumen and know-how developed by Canadians and applied in the Canadian energy sector.

  5. Assets will be priced with a far greater appreciation of underlying risks: Expect to see an increased discount applied to assets in these challenging jurisdictions.

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