Oil industry mergers in the first half of this year were down significantly – to C$6.6-billion from C$23.8-billion in the first half of 2007 – according to a survey by Sayer Energy Advisors. That’s a 72% drop, ending a succession of rising numbers over the last five years.

Sayer also said in a note to clients that the number of large transactions (over C$5-million) fell to 70 from 110, and there were no deals at all topping C$1-billion, compared to four deals worth a total of C$15.9-billion in the same period of last year.

More and more attention these days is being focused on unconventional resources plays, such as the Montney and Horn River in British Columbia, the Bakken in Saskatchewan and the Utica in Quebec. Advances in completion technology and horizontal drilling techniques are making it easier and more profitable for operators to exploit these shale formations.

In recent weeks, EnCana Corp. (ECA) and Talisman Energy Inc. (TLM) have noted growing commitments to their unconventional assets and on Monday, Shell Canada Ltd. [SHL.BE] said it had entered into an agreement to buy Montney-rich Duvernay Oil Corp. (DVNLF.PK) for C$5.9-billion.

Shell Canada Ltd.'s proposed C$5.9-million acquisition of Duvernay Oil Corp. (DVNLF.PK) has analysts chatting up the tremendous resource value in the Montney shale natural gas play in northeast B.C., and offering up some Duvernay replacements to invest in.ff

BMO Capital Markets analyst Gordon Tait said the C$83 per share Duvernay deal, which is worth well above the average transaction prices paid over the past year, is a positive development for ARC Energy Trust (AETUF.PK).

Investors can expect a big jump in Duvernay Oil Corp. (DVNLF.PK) shares after the company agreed to a takeover bid from Shell Canada Limited worth C$5.9-billion on Monday morning.

Under the offer, shareholders of Duvernay will receive C$83 per share in cash, representing a 42% premium over Friday's closing price of C$58.44 - not bad for a day's work.

Duvernay Oil Corp. (DVNLF.PK) shares were down slightly Tuesday afternoon after the company said it increased its 2008 capital program by C$50-million to C$450-million, and will also issue C$91-million in new equity.

Duvernay said the spending increase will be applied to its key operating areas in northeastern British Columbia and west-central Alberta, including the Montney Shale natural gas play in B.C. where an additional 14 to 16 horizontal wells are now planned by year-end.