According to the Canadian Association of Petroleum Producers (CAPP), capital investment across Canada’s oil and natural gas industry is forecast to fall to $37 billion in 2019 compared to $81 billion in 2014. This drop will result in the lowest levels of capital investment since 2009. Market sentiment is pessimistic due to restricted tidewater access, the Redwater decision, lack of pipelines and detrimental federal policies. This has taken a significant toll on the oil and gas mergers and acquisitions (“M&A”) markets. Properties that were once fetching high valuations are now going “no bid” or are considered unsellable. Currently the M&A landscape is facing a number of headwinds. If your team has experienced any of the following issues, Edge can help:
- Low valuations for properties with inactive assets
- “No bids” on divestments
- Licensee Management Rating (LMR) limiting potential buyers
- No attempt to market properties with abandonment and reclamation obligations
- Private equity backing out of deals with associated environmental liabilities
- Regulators implementing mandatory abandonment and reclamation regulations
Edge has the solution to unlock deals that were previously stalled because of these factors. With the spotlight on environmental liabilities, negative market sentiment and restricted access to capital, it is more important than ever to have a leg up when divesting properties.
To learn more about how Edge can facilitate your M&A programs, please see our website www.edgelrm.com and contact us today.
Greg A. Sawchenko
VP Business Development
Edge Liability Risk Management
ABOUT EDGE LIABILITY RISK MANAGEMENT:
Edge Liability Risk Management (“Edge”) is a firm that specializes in the management of oil and gas environmental liabilities, with a focus on risk assessment. Edge’s industry leading solutions allow operators to realize higher sale multiples on properties and unlock deals for properties that were once seen as unsellable. Our goal is to help operators turn their liabilities into opportunities.