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Last oilsands blockbuster?

Cenovus Energy's blockbuster $17.7-billion deal to buy most of the Canadian assets of Houston-based ConocoPhillips will likely stand as the biggest acquisition in the oilsands sector for years to come, say some industry watchers.

While other deals are expected to materialize, analysts note there are fewer significant assets available after more than a year of consolidation transactions in Alberta's oilpatch worth billions.

"If you think about who's left in terms of remaining players, there aren't that many," said Peter Argiris, principal analyst for consultancy Wood Mackenzie in Calgary.

"The days of $15-, $12- and $17-billion deals, I don't think we'll see that. I think the big ones are probably eaten up now."

Alberta's oilsands, the third-largest proven oil reserves in the world, are also among the most costly and carbon-intensive to produce from. These factors, combined with the pullback in crude prices, have spurred several foreign players to exit the sector so they can reinvest their capital elsewhere. Big Canadian players like Cenovus have stepped in to buy, looking to better control costs by operating at a larger size.

Further consolidation can be expected, but probably on a smaller scale, said Nick Lupick, an analyst with AltaCorp Capital.

"Eventually, obviously, you will run out of opportunities given that you are likely to have three to five major E&Ps (explorers and producers) controlling most of the production," Lupick said.

The ConocoPhillips sale was announced Wednesday after the close of Canadian and U.S. stock markets, when Cenovus stock was at $17.45 in Toronto. At about 12:30 p.m. ET on Thursday, Cenovus shares were trading at $15.28, down $2.17 or about 12.5 per cent.

ConocoPhillips's New York-listed shares were up about eight per cent.



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