Oil and gas industry experts predict that the trend of mergers and acquisitions will persist following a series of significant Canadian transactions last year. The industry is witnessing companies opting for consolidation to enhance their market position amid stagnant oil prices, increasing shareholder demands for better returns, and uncertainties in global markets. Grant Zawalsky, a senior partner at Burnet, Duckworth and Palmer LLP in Calgary, highlighted that mergers and acquisitions offer a growth opportunity when drilling investments may not yield expected returns, emphasizing that unless market fundamentals change, this trend is likely to continue.
Zawalsky was involved in three major energy transactions in the previous year, including the MEG Energy Inc. bidding war, Whitecap Resources Inc.’s merger with Veren Inc., and Ovintiv Inc.’s acquisition of NuVista Energy Ltd. Burnet, Duckworth and Palmer played a role in eight of the top 10 energy producer deals in 2025. While most transactions were domestic, Ovintiv, although based in Denver, has a significant presence in Canada.
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 2025. He described the current market as favorable for buyers seeking cost-effective ways to expand their drilling portfolios. Despite an improved investment climate due to energy agreements between Ottawa and Alberta, there hasn’t been a notable increase in foreign interest in Canadian acquisitions.
According to Zawalsky, potential buyers are evaluating the value of Canadian assets against regulatory challenges and export infrastructure needs. While global interest remains subdued, U.S. private equity firms are showing interest in acquiring Canadian assets, leveraging lower costs and perceived opportunities for value appreciation. Zawalsky noted that these players are more inclined to take regulatory risks compared to traditional oil and gas producers.
Zawalsky also mentioned that hostile takeover attempts, like the one by Strathcona Resources Ltd. targeting MEG last year, are expected to be rare occurrences. ATB Capital Markets forecasted a modest slowdown in consolidation among explorers and producers in 2026 due to various factors, including limited high-quality targets and challenging market conditions affecting valuation decisions.
