U.S. producers are expected to continue to view Canadian exploration and production (E&P) companies as enviable takeover targets in 2002, according to analysts.

“I see no reason for it to end” during the new year, but the acquisitions “probably will not be at the same pace” as that of last year, said Kate Warne, senior energy analyst and Canadian market specialist with the St. Louis, MO-based brokerage firm of Edward Jones.

U.S. acquisitions of Canadian companies totaled nearly $40 billion in 2001, according to a report in The Canadian Press. Some of the top targets were Anderson Exploration Ltd., Canadian Hunter, Gulf Canada and Westcoast Energy.

In 2002, Warne believes U.S. producers are likely to take advantage of the “low price environment” for both natural gas and crude to continue to snatch up Canadian E&P assets at bargain-basement prices.

U.S. producers will view Canadian production companies as “attractive investments” to put their cash into, she told NGI, but the size of the Canadian companies to be acquired in 2002 is likely to be considerably smaller. Most of the mid-sized Canadian producers have already been picked over by U.S. companies, which leaves only smaller Canadian producers as potential targets, Warne noted.

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