Kimmeridge eyes more Canada oil and gas activism amid trade war, underperformance

David French

Tue, Mar 11, 2025, 2:03 PM 2 min read

By David French

HOUSTON (Reuters) - Kimmeridge Energy Management volition prosecute much activism among Canadian lipid and state producers, a elder enforcement told Reuters connected Tuesday, arsenic it targets underperforming companies and imaginable benefits emanating from the commercialized warfare with the United States.

President Donald Trump has ratcheted up tariffs connected his country's bluish neighbor, though Canadian lipid and state exports to the U.S. person truthful acold received less penalties.

The tensions should instigate caller reasoning to boost Canadian vigor exports, particularly of liquefied earthy gas, to different countries, according to Kimmeridge managing spouse Mark Viviano. He said that would payment operators' valuations successful the agelong term.

"Ultimately, we deliberation (tariffs and the commercialized warfare are) going to beryllium semipermanent affirmative for the Canadian industry, due to the fact that it volition unit them to look extracurricular the U.S. and diversify their export markets into Asia," Viviano said successful an interrogation connected the sidelines of the CERAWeek conference.

Kimmeridge past week struck a colony with Advantage Energy, aft the Calgary, Alberta-based lipid and state shaper named 2 caller autarkic directors and acceptable up a peculiar committee to survey a imaginable merchantability of the company.

Viviano said Kimmeridge expects to marque further investments, fixed Canada's upstream manufacture is ripe for activism, though it has nary existent positions successful Canada extracurricular of Advantage.

"We deliberation that it needs to beryllium consolidated, fixed however fragmented the manufacture is, and we deliberation we person a fig of poor-performing absorption teams and boards which are preoccupied with increasing accumulation alternatively of generating shareholder value," helium said.

Kimmeridge has been a starring unit successful pursuing activism successful the U.S. lipid and state assemblage successful caller years, targeting galore of the aforesaid issues Viviano sees prevalent successful Canada today.

It has been connected the sidelines successful the U.S. for the past year, however, and presently owns lone 1 U.S. producer, Expand Energy, owed to bequest positions successful Chesapeake Energy and Southwestern Energy anterior to their merger to make Expand.

Slumping U.S. equity markets, combined with little crude prices, person pushed down valuations of galore tiny and mid-sized U.S. producers by much than 20% successful the past month.

"Clearly we're seeing a important magnitude of volatility and a tremendous magnitude of underperformance successful immoderate of the smaller and mid-sized exploration and accumulation companies," Viviano said.

"So we person superior to enactment to work, and we deliberation the marketplace is coming our way."

(Reporting by David French successful Houston; Editing by Nia Williams)