A new study shows that the total number of companies producing oil and natural gas in Western Canada has decreased by 17.5% since the beginning of the fall in world oil prices at the end of 2014.
According to Calgary-based consulting firm XI Technologies, a total of 1334 active companies – listed companies, private companies and foreign capital companies – reported producing oil or gas in December 2018.
This represents a decline of 282 companies from the 1616 counted the same month four years earlier, says an analysis of the XI Technologies database. Investor confidence was severely constrained during this period as oil prices dipped to a low at the end of 2016. In addition, Canadian oil prices suffered last year from lack of capacity in the pipeline system.
Shovik Sengupta, data solutions specialist for XI, said the data showed a period of significant consolidation in the industry.
Tom Pavic, senior vice president of Calgary’s Sayer Energy Advisors, said the missing companies were probably small companies that did not have the financial backing to drill today’s unconventional oil and gas wells.
This trend is consistent with the 31% decrease in the number of large energy companies listed on the Toronto Stock Exchange in the last four years. On the TSX Venture Exchange, this decline was 44% during the same period.