Q & A with Burnett Duckworth and Palmer, LLP Grant Zawalsky
Consolidation was the name of the game for the energy sector in 2023, 24 and 25 and there’s a good chance 2026 will follow in those footsteps. In the U.S. ,several megamergers set the tone: the ExxonMobil – Pioneer Natural Resources US$59–60 billion, all‑stock transaction completed in mid-2024; the Chevron – Hess Corporation transaction of US$53–60 billion, all‑stock, which closed mid‑2025; the Devon Energy – Coterra Energy US$47–58 billion, all‑stock merger expected to close in Q2 2026
In Canada, the Cenovus Energy – MEG Energy deal of C$7.9 billion, which closed late 2025, and the Suncor acquisition of TotalEnergies EP Canada for C$5.5 billion, which closed in 2023, led the way in M & A deals.
The Cenovus Energy – MEG Energy transaction played through an unsolicited hostile and contentious bid by Strathcona Resources for MEG. After multiple delays and renegotiations, MEG shareholders approved the Cenovus bid.
Burnett Duckworth and Palmer, LLP, one of the premier law firms in Canada, served as advisor for MEG Energy and also advised on eight of the 10 largest upstream energy deals in 2025. Business Edge’s Ernest Granson had a chance to chat with Grant Zawalski, Senior Partner and Vice Chair at BD & P, about those transactions and about what to expect in the coming year.
BE Grant, we’re well into the year 2026 and, like the year 2025, there’s uncertainty and change expected. However, that uncertainty didn’t stop substantial merger and acquisition activity from taking place in the Canadian oil and gas sector or in the U.S. either, for that matter. BD & P played a prominent advisory role in the largest Canadian upstream deals over the last year. Each of those were significant, but let’s take a look at the two largest transactions – the $15 billion White Cap Resources acquisition of Green Energy and also the MEG Energy transaction. Would you say that the Alberta Montney and Kaybob Duvernay formations would be the main benefit for Whitecap?
GZ Absolutely. Both White Cap and Veren Inc. (formerly Crescent Point Energy Corp.) had already taken major stakes into the Montney and Duvernay plays. The Montney is probably the number one resource play in Canada, and on a profitability basis, stands up with any play in North America, including the Permian Basin. It allowed the two companies to come together, have much greater scale, and better access to equity and debt markets. It’s also part of the trend we’ve seen for consolidation to drive down costs and increase returns to shareholders which has been an important underlying theme in both the Canadian and U.S. energy industries over the last 10 years.
BE Would you say the same applies to some of these other transactions that you were involved with, for instance, Ovintiv Inc.’s acquisition of NuVista Energy Ltd. Tell us what the benefits were for that transaction.
GZ Let’s start with Ovintiv-NuVista. It was a little different than the other transactions – probably the most substantial cross border transaction. Ovintiv is a Denver-based company, but with a long history in Canada. It allowed that company to grow its Montney position in Canada. Ovintiv wanted to become a two-play company – in the Permian Basin and the Canadian Montney. It considers those the top two plays that have substantial size and duration in North America and to enjoy the same kind of synergies that come out of these type of mergers to drive down the cost of drilling along with the ability to procure services in in bigger scale. That’s been an ongoing theme. It probably started a little earlier in the U.S., but even in the Canadian sector, we saw high activity in the last two years and it’s our expectation that activity is going to continue into 2026 as long as the underlying factors continue to apply.
BE How did the significant transactions compare to those of 2024 and 2023? There were major acquisitions during each of those years.
GZ Yes, but let’s step back. The reasons for the consolidation, particularly in the Canadian market is because of three major factors. The first is: the market isn’t giving the price signals on either oil or gas to encourage people to grow through the drill bit. If you can’t grow through the drill bit, then consolidation and doing M & deals allows you to do that if you have a better cost of capital than the party you’re acquiring.
The second factor speaks directly to the need for shareholder returns ever since the price oil fell off from the $140 per barrel level. From a market point of view, the shareholders made it clear they didn’t want to see all of the profits from the business reinvested. They wanted to see returns to shareholders, either in the form of dividends or share buybacks.
And thirdly, for the Canadian market, there’s still a lot of uncertainty about egress. We’re constrained for oil and gas as well as natural gas, although the egress situation for oil is improved with the Trans Mountain Pipeline coming on. But all the pipelines will be relatively full by 2027-2028. For companies to make capital investments in long term projects, particularly in the oil sands, they need the assurance that they can have egress to world prices and not face the steep discounts that we did when there was constraint on the pipelines. It’s those three factors that are the big drivers for consolidation in the Canadian oil and gas business.
Pull quote: “The merged companies, going forward, have much greater financial strength and greater depth of properties and plays and ability to take on more risk and larger projects.”
Image: Grant Zawalisky cropped 3.png
Caption: Grant Zawalsky, Senior Partner and Vice Chair at Burnett Duckworth and Palmer, LLP. Photo credit: BD&P
BE Let’s talk about the controversy surrounding the Cenovus Energy – Strathcona acquisition bids for MEG Energy. Certainly, plenty has been said about it through much of 2025 but in your view, how did that unfold?
GZ Quite frankly, unsolicited bids are fairly uncommon in Canada, particularly in the energy industry. Once the Canadian securities laws were changed to what is colloquially known as ‘just go slow,’ to allow 105 days for the target company to run a sales process, it made unsolicited or hostile bids very risky or very expensive. Curiously, two out of the three unsolicited transactions you’ve seen in the last 10 years were aimed at Meg, as the Husky one was not completed in 2018. So it’s fairly unusual. I think those kind of transactions will be the outliers rather than the common theme of friendly mergers.
BE How do you feel about Strathcona’s Executive Chair, Adam Waters, publicly stating that MEG’s handling of the process would become a business school case study in dereliction of fiduciary duty? That’s a quote from him in a CBC interview in September of 2025. Does that have any merit?
GZ I believe the outcome will be decided in the market. I think the MEG shareholders at the end of the day were quite happy with the Cenovus offer. It’s where those assets probably best belong. They’ll realize the most synergies because they have properties that are adjoining. At the end of the day, they were the party that could best achieve operational synergies and get the best return. Quite frankly, if you look where bid started and where the price ended up – at more than $30 – from a board point of view, once it’s clear that the company is going to be sold, the directors have to try to maximize value. The board took consistent steps to try to get higher bids from both Strathcona and from Cenovus and I think they were successful in doing that. I can understand, from a Strathcona point of view, they’re disappointed after putting the time and effort into the bid and not being successful. But that’s the nature of the capital markets.
BE Would it be fair to say that the controversy was maybe not so much about the final price level and more about governance?
GZ The special committee of MEG was always very clear in its objective – that it was going to consider what was in the best interest of MEG’s stakeholders, and the shareholders are important stakeholders. Each of those steps, some of which Strathcona didn’t agree to, all resulted in higher bid prices along the way.
BE Thanks for clearing up some of that for us. Grant, I think we can move on from that topic. I would like to ask you about the process which a law firm like BD & P undertakes when stepping into the role of advisor in an M and A capacity. What are the steps that you take as the advisor, and what are the factors to take into consideration?
GZ Usually, for law firms, the first part is proactive advice with respect to how these processes work and how the clients can be prepared and what is the best structure of their transaction to maximize value or whatever the business objectives are. It’s primarily a process of understanding the client’s business objectives and tailoring a legal solution to help achieve those. As you pointed out, we were involved in eight of the top 10 Canadian energy transactions. They were all very different. They all have unique aspects. There is no real cookie cutter approach when looking at these from a business or a legal point of view, It’s all about figuring out what your objectives are and how to best achieve them.
BE Has that process changed at all over, say, the past 10 to 20 years, whether you’re speaking legally or economically?
GZ The environment for both legal and business point of views has changed dramatically. We go through different cycles and those cycles very much impact how processes are run from a legal and a business point of view. It’s a very rapidly changing marketplace. I think the biggest thing you can say about the last 10 years is that the rate of change has increased from a business point of view. That means legal solutions have to change to keep up with that.
BE Let’s move to the North American scene. A number of major acquisitions took place in that jurisdiction, some of which were completed in 2025 although initiated in previous years. How do these types of, what’s been termed mega deals, compare to the Canadian transactions. Can we expect to see more upcoming? For example, we had the Devon Energy- Coterra Energy transaction. That was close to a $60 billion, all-stock merger. We had Exxon Mobil acquiring Pioneer Natural Resources. That was worth almost $60 billion as well. Are there any comparisons that you can make?
GZ I think what we saw in the U.S. from the super majors like Exxon and Chevron, started the ball rolling, and you’ve seen that move down market. That trend didn’t start as early in Canada, but I think what you’re seeing, as you saw last year, and will probably we will see this year, is that theme of consolidation moving across the border. It was delayed by a year or two in Canada. Now I don’t have any actual knowledge, but a large-scale merger in Canada has been widely speculated in the market for one of the big five of Canadian oil and gas companies. But only time will tell.
BE Finally Grant, are there any conclusions you would like to draw about the Canadian and North American sectors in general. We’ve already addressed that somewhat, but as you just mentioned just now, can we possibly expect some major consolidation going on here the next couple of years?
GZ Yes, I think if we continue in a cycle of relatively low commodity prices for both oil and natural gas that this cycle will continue. When the market signals that there’s going to be a shortage of oil or gas, and the price moves up, then you’ll see companies move with bigger, organic programs to bring oil to the market.
BE Would that type of major consolidation be advantageous? Would there be benefits to the oil sector in general?
GZ Oh, absolutely. The merged companies, going forward, have much greater financial strength and greater depth of properties and plays and ability to take on more risk and larger projects. When the market signals that, in the long term, we need more oil, they will have the ability to bring on that oil, whether it be through liquids in the Montney and DuVernay plays, or whether it be in oil sands/heavy oil sectors. There is lot of energy resource in Canada, but at these prices (prior March 2026), it’s not going to get developed.
BE Thanks for bringing us up to date, Grant. We appreciate your insight.