The oil and gas industry experts anticipate a continued trend of mergers and acquisitions following a series of significant deals in Canada last year. However, the involvement of foreign buyers in this ongoing consolidation wave remains uncertain.
With oil prices stagnant around $60 US per barrel, companies are recognizing the benefits of expanding through M&A activities. Shareholders are seeking improved returns, and market uncertainties are impacting the ability to sell oil globally. Grant Zawalsky, a senior partner at Burnet, Duckworth and Palmer LLP in Calgary, noted that M&A provides a growth opportunity when drilling investments may not yield anticipated returns.
Last year, Zawalsky was involved in three major energy transactions, including the successful bidding war for MEG Energy Inc. by Cenovus Energy Inc., Whitecap Resources Inc.’s $15 billion merger with Veren Inc., and Ovintiv Inc.’s $3.8 billion acquisition of NuVista Energy Ltd. Burnet, Duckworth and Palmer was part of eight of the top 10 energy producer deals in 2025.
While most transactions were among Canadian companies, Ovintiv, headquartered in Denver but with significant Canadian operations, stood out. Tom Pavic, president of Sayer Energy Advisors, foresees a busy year ahead, with a focus on smaller-scale deals compared to the billion-dollar transactions of the past year.
Pavic described the current market as favorable for buyers seeking cost-effective ways to increase drilling inventories. Despite positive developments in the investment environment, such as the energy agreement between Ottawa and Alberta, there has been limited global interest in acquiring Canadian assets.
Potential buyers are evaluating the value of Canadian assets against regulatory challenges and export infrastructure requirements. However, U.S. private equity firms are showing interest in acquiring Canadian assets, enhancing production, and potentially selling or taking companies public.
Zawalsky highlighted that these investors are attracted to the perceived value opportunities in Canadian assets and are more willing to navigate regulatory risks compared to established oil and gas producers. Hostile takeover bids, like the one that involved MEG Energy last year, are expected to be less common.
Looking ahead, ATB Capital Markets anticipates a modest slowdown in consolidation activities among explorers and producers. Structural and economic factors, including a scarcity of high-quality targets and oil price weaknesses, are cited as reasons for this projected decline in momentum in the coming year.