Over the past few years, banks with ambitions in the oil patch have increasingly focused on the real estate side of the business – an area where Canadian Imperial Bank of Commerce is now expanding.
CIBC on Thursday unveiled the purchase of Houston-based Griffis & Small, a 10-person operation that focuses on acquisition and divestiture. A&D is the business of helping oil and gas companies trade land. It's a business banks like for all sorts of reasons.
Big companies don't sell all that often, but they flip land packages all the time.
New chief executive officer who wants to move toward natural-gas liquids from heavy oil? Got an idea how you can better exploit some drilling targets than the folks at that other company who can't make it work economically? Got a private equity fund that's interested in purchasing oil and gas properties? Better call your A&D banker.
"As companies have gotten bigger, transactions can get smaller, so companies don't trade but their assets do," said Geoff Belsher, who heads investment banking for CIBC.
A big enough land sale can lead to lending business, or even to an equity or debt offering.
And there's just the simple ability to offer clients one more service so they don't have to try out the competition – after all, they might like them.
CIBC's new A&D team will combine with a group of about half a dozen CIBC A&D specialists already in Calgary.
Griffis & Small worked on deals such as Enduring Resources' $1.3-billion (U.S.) sale of properties to Norway's Statoil and Canada's Talisman Energy in 2010.