MERGER-MANIA HITS FEVER PITCH IN CANADIAN OIL INDUSTRY

MERGER-MANIA HITS FEVER PITCH IN CANADIAN OIL INDUSTRY

Takeover mania is sweeping the Canadian oil patch, and industry analysts say the acquisition binge is likely to intensify as weak oil and gas prices

pressure many companies.

''With some companies, production results haven't matched what they've been telling the Street, and they have a lot of unhappy shareholders," said Frank Sayer, president of Calgary-based Sayer Securities Ltd.David Stenason, a Wood Gundy analyst, said the buyout craze will likely accelerate in coming months amid the "double whammy" of weak oil and gas prices.

Mr. Sayer said the Canadian industry recently has adopted a more aggressive, U.S.-style attitude toward mergers, showing much less reluctance to make unsolicited bids for smaller, underperforming companies.

"It's large companies going after smaller companies," he said. ''Interest rates are down, large companies have ready access to both the equity and debt markets, and sources of money are available to them."

According to figures compiled by Sayer Securities, the value of Canadian oil and gas companies and assets for sale at the end of June totaled 2.12 billion Canadian dollars ($1.55 billion), up from C$1.76 billion at the end of 1994.

Recent deals include Gulf Canada Resources Ltd.'s C$138 million takeover of Calgary-based Mannville Oil & Gas Ltd. and Penn West Petroleum Ltd.'s C$70 million merger with Northern Reef Exploration Ltd.

In the season's biggest deal, the Amoco Canada Petroleum Co. unit of Amoco Corp. offered C$757 million for Calgary-based Home Oil Co.

Home rejected the bid.

Calgary-based Crestar Energy Inc. last week announced a hostile bid of C$5.80 a share, or C$168 million, for Ranchmen's Resources Ltd., also based in Calgary.

Ranchmen's, which retained investment dealer Scotia McLeod Inc. To evaluate the offer and seek alternative bidders, said it considers the bid unfriendly.