December 12, 2013 Sections
Winnipeg Free Press - PRINT EDITION
CALGARY -- Ernst & Young foresees a lot of "for sale" signs being posted on energy assets around the world -- and Canada's oilpatch is no exception.
The global advisory firm found 37 per cent of oil and gas respondents it surveyed globally are either in the process of selling assets or plan to do so over the next two years.
Barry Munro, who heads up Ernst & Young's Canadian oil and gas group, said Canadian oilpatch companies face their own unique set of challenges that have made capital costlier and harder to come by.
Those headwinds include difficulty in getting crude oil to market amid pipeline bottlenecks, stubbornly low natural gas prices, rising costs and regulatory delays.
Shedding non-core properties is one way for companies to raise enough capital to survive, and is often a more attractive option than raising equity and diluting stock prices or loading on debt.
Though the survey's results weren't broken up by country, Munro said he has a good idea what kinds of conversations are happening around boardroom tables in downtown Calgary.
"I think that virtually every energy company is thinking about whether they should be buyers or sellers of either specifics assets or the whole company," Munro said.
-- The Canadian Press
Republished from the Winnipeg Free Press print edition February 11, 2013 B6