A new trend of transactions being done on a "quiet basis" is emerging in the Canadian M&A space in 2007, according to Tom Pavic, vice president of Calgary-based Sayer Energy Advisors.

So far this year, a number of deals have been completed without any broad public marketing, including Progress Energy Trust's acquisition of BG Canada; Exoro Energy Inc.'s purchases of assets from Onyx Oil & Gas Ltd.; Long View Resources Corp.'s merger with Reece Energy Exploration Corp.; and Strike Petroleum Ltd.'s arrangement with FairWest Energy Corp.

Prices for Canadian reserves hit C$20.13 per barrel of oil equivalent in 2006, from C$15.83 in 2005, according to Pavic. The price is the highest recorded since Sayer began publishing M&A statistics in 1988, he adds. In the past five years, the median price for reserves has increased 142%, from C$8.31 per BOE in 2002.

There were seven transactions valued at more than C$1 billion in 2006, while there were five of these in 2005. The royalty trusts contributed a number of them: four in 2006, totaling more than C$7.2 billion combined, he says.

The largest deal of 2006 didn't involve any of the trusts, though, he adds: Canadian Natural Resources Ltd.'s acquisition of Anadarko Canada Corp. for C$4.8 billion was the largest deal of the year. CNR gained producing properties in northeastern British Columbia, the Peace River and Wild River areas of Alberta and the Hatton area of southwestern Saskatchewan.

Though two of the largest deals last year involved combinations of trusts, the trusts were not shut out of the M&A space in Canada after a repeal of trusts' tax breaks was announced in October, Pavic says. Both Penn West and Progress Energy Trust announced sizeable acquisitions after the announcement.



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