Major Mergers Ahead in Oil Patch
Source: Financial Post, Carrie Tait (6/14/10)
"25-year energy vet says a major shakeup is about to hit the oil patch."
Q: How do you see the market changing over the next year or two?
A: Once we get through 2010 into 2011 when the trusts conversions all shake out. . .major, major shift. If you take a picture of the landscape today and another picture at the end of 2011, they will be very, very different. [I don't think] 40% of the companies that are currently traded will be around. I think they will be consolidated up by other companies, whether the majors or the larger trusts. I think you're going to see mergers. . .
Q: What's your exit strategy if you're a smaller player?
A: It is not visible at this particular time as to how juniors will liquidate in the future, but liquidity events will present themselves over the next three–five years. I think we can demonstrate that we can grow in certain areas; and, if you underpin your company with very good assets, people will always want them in the future.
Q: Do you think the Chinese will look at smaller projects?
A: I believe that over time. My perspective would be once you're working in an area you'll continue to expand that area. And it is no different all over the globe. . .So, yes, initially they are looking at our oil sands for investment, but when they are here, why not continue to expand? All your putting is more product under management. . .