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

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

There were 410 COVID-19 cases recorded in Alberta Wednesday. (File photo)
Alberta records 410 COVID-19 cases Wednesday

Central zone dropped to 160 active cases

Shaun Isaac, owner of Woodchucker Firewood in Trochu, is awaiting a new shipment during a firewood shortage in the province. All of the wood he has left is being saved for long-time customers who need it to heat their homes. (Contributed photo).
Firewood shortage in central Alberta caused by rising demand, gaps in supply

‘I’ve said “No” to more people than ever’: firewood seller

Pilots Ilona Carter and Jim Gray of iRecover Treatment Centres, in front of his company’s aircraft, based at Ponoka’s airport. (Perry Wilson/Submitted)
95-year-old Ilona Carter flies again

Takes to the skies over Ponoka

file photo
Maskwacis RCMP investigate pedestrian fatality

Collision on Highway 2A causing fatality still under investigation.

Royal Alexandra Hospital front-line workers walk a picket line after walking off the job in a wildcat strike in Edmonton, on Monday, October 26, 2020. THE CANADIAN PRESS/Jason Franson
Alberta labour board orders health-care staff who walked off the job to go back to work

Finance Minister Travis Toews said in a news release that he was pleased with the labour board’s decision

Husky Energy logo is shown at the company’s annual meeting in Calgary on May 5, 2017. THE CANADIAN PRESS/Jeff McIntosh
Husky pipeline spills 900,000 litres of produced water in northwestern Alberta

The energy regulator says environmental contractors are at the site

A raccoon paid a visit to a Toronto Tim Hortons on Oct. 22, 2020. (shecallsmedrew/Twitter)
Who are you calling a trash panda? Raccoon takes a shift at Toronto Tim Hortons

Tim Hortons said animal control was called as soon they saw the surprise visitor

Sharon Hickin, general manager of the Days Inn Sylvan Lake and the new Lake House Diner, poses for a photo outside the new restaurant. Photo by Megan Roth/Sylvan Lake News
Pandemic puts extra hurdles in place for new Sylvan Lake businesses

Over the past seven months numerous new businesses have opened in Sylvan Lake, despite the pandemic

Rachel Notley, leader of Alberta’s official Opposition, speaks in Edmonton on Wednesday, Oct. 16, 2019. Notley says the government needs to sharply ramp up the number of contact tracers if it wants to get a handle on the rising number of COVID-19 cases. THE CANADIAN PRESS/Jason Franson
Alberta Opposition calls for more COVID-19 contact tracers as case numbers rise

Alberta has about 800 tracers, and chief medical health officer Dr. Hinshaw says more are being recruited

Royal Alexandra Hospital front-line workers walk a picket line after walking off the job in a wildcat strike in Edmonton, on Monday, October 26, 2020. Hospital and health-care workers who staged a one-day illegal walkout returned to work Tuesday while politicians swapped recriminations and accusations in the house over the dispute. THE CANADIAN PRESS/Jason Franson
Alberta health staff return to work, surgeries resume after one-day walkout

AHS estimated 157 non-emergency surgeries, most of them in Edmonton, had to be postponed as a result of the walkout

Prime Minister Justin Trudeau makes his way to provide an update on the COVID pandemic in Ottawa on Tuesday, Oct. 27, 2020. Canada has reached a grim milestone in the COVID-19 pandemic, surpassing 10,000 novel coronavirus deaths. THE CANADIAN PRESS/Sean Kilpatrick
Alberta COVID deaths pushes Canada past milestone of 10,000 deaths

Canada crossed the threshold of 5,000 deaths on May 12, a little over two months after the first was reported

Prime Minister Justin Trudeau provides an update on the COVID pandemic during a press conference in Ottawa on Tuesday, Oct. 27, 2020. THE CANADIAN PRESS/Sean Kilpatrick
Trudeau says pandemic ‘really sucks,’ and that Christmas gatherings are up in the air

The prime minister encouraged residents to continue to follow the advice of local health authorities

Most Read