Were Canadian Oil & Gas Companies Able To Raise Finance In 2015 And 2016?

New analysis from CanOils has shown that while the total value of Canadian oil and gas company financing arrangements being completed has fallen since the commodity price downturn began in late 2014, companies have still been able to raise finance.

Looking at all TSX and TSX-V listed oil and gas companies that produced between 0 and 100,000 boe/d in their most recently released operational results, we can see that in the past year around Cdn$8.6 billion in gross proceeds (see note 1) has been raised between 2015 and 2016 (see note 2) in one of two ways:

Equity Financing – The raising of funds through the sale of company stock, either in the form of common shares, warrants or a combination of units.

Debt Financing – The raising of funds through the initiation of a loan agreement or note offering. Excludes drawings on revolving credit facilities.

Source: CanOils Financings – Note: Q1 2016 represents the value of all equity and debt financing deals that completed between January 1, 2016 and March 21, 2016, which was the time of writing. A senior producer is a company that produced over 100,000 boe/d in Q4 2015.

This Cdn$8.6 billion total is of course much lower than the 2014 total of Cdn$13.0 billion and there was a steep drop in finance raised from Q2 2014 to Q1 2015. While the price downturn is the main instigator of this drop in finance being raised, these numbers themselves do not give any idea whether the drop is due to companies being unable or unwilling to source extra finance. In all likelihood, it is probably a combination of both. Companies might have seen it as a tough prospect to approach a bank for a loan outside of its existing credit facilities or to successfully issue new shares in a struggling marketplace at lower prices and not moved ahead with any such plans. Equally, if companies did try and get a new loan from a bank, it may have been refused – something that would be unlikely to ever reach the public arena.