We apologize, but this video has failed to load. This advertisement has not loaded yet, but your article continues below. MEG Chief Executive Derek Evans declined to comment. Unauthorized distribution, transmission or republication strictly prohibited. “You will continue to see stock-based deals with skinny premiums as companies scrape together enough accretion and cash flow to survive,” said Ryan Bushell, President of Newhaven Asset Management, which holds Canadian Natural Resources shares. The C$3.8 billion ($2.9 billion) combination announced Sunday, the largest Canadian oil and gas deal in nearly four years based on enterprise value, may pressure peers to get bigger or sell. Cenovus-Husky deal creates new Canadian oil major, stokes hunger for deals, tap here to see other videos from our team. Canadian companies should follow European oil producers by expanding into renewable energy, said Keith Stewart, senior energy strategist at Greenpeace Canada. Discussions for the tie-up – code-named Purple to represent the combination of company colors, red and blue – got serious only a couple of weeks ago, said the source. MEG Energy, a mid-tier producer that Husky sought to buy in 2018 before abandoning its bid, looks like a target again, said Nuttall, who holds MEG shares. Cenovus Chief Executive Alex Pourbaix told Reuters the deal lowers the company’s operating costs and adds pipelines, storage and refineries, making it more resilient to low prices. Cenovus is a Canadian integrated oil and natural gas company headquartered in Calgary. "We're like the dog that caught the car," he said. Husky’s biggest investor, Hong Kong tycoon Li Ka-shing, is committed to being a long-term shareholder in the new company, Husky Chief Executive Rob Peabody said. Pandemic travel restrictions have crushed demand for jet fuel and gasoline, weakening crude prices and spurring companies to cut costs or merge to survive. Pandemic travel restrictions have crushed demand for jet fuel and gasoline, weakening crude prices and spurring companies to cut costs or merge to survive. Husky's biggest investor, Hong Kong tycoon Li Ka-shing, is committed to being a long-term shareholder in the new company, Husky Chief Executive Rob Peabody said. “In buying up more high-carbon reserves, Canadian oil companies are gambling that the world will fail in the fight against climate change,” he said. Canadian companies should follow European oil producers by expanding into renewable energy, said Keith Stewart, senior energy strategist at Greenpeace Canada. This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. “As these companies are desperate for social license, only the very best in my opinion will receive any inkling of support from institutional investors,” he said. We ask you to keep your comments relevant and respectful. By continuing to use our site, you agree to our Terms of Service and Privacy Policy. Cenovus Energy's acquisition of Husky Energy creates a new Canadian-owned major oil producer and lends the long-struggling oil … The deal may be only the first major tie-up of the pandemic, said Eric Nuttall, senior portfolio manager of Ninepoint Partners. Such deals represent a need for greater access to capital, as lenders have little appetite to fund mid-sized producers, Bushell said. “You will continue to see stock-based deals with skinny premiums as companies scrape together enough accretion and cash flow to survive,” said Ryan Bushell, President of Newhaven Asset Management, which holds Canadian Natural Resources shares. "We have a lot of hard work ahead of us.". "If someone wants scale and a very high-quality asset and is able to take on the debt, MEG's the last large asset available," he said.

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