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The good news: deal making in Canada’s oil and gas sector is up sharply this year.

Through the first six months of 2016, the total enterprise value (equity plus debt) of oilpatch mergers and acquisitions jumped 60 per cent to $15.5 billion. That’s up from $9.7 billion in the first half of 2015, says Sayer Energy Advisors of Calgary.

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Most of the transactions in the first half were oil-weighted deals.

Through August, the year-to-date tally has swelled to $17.8 billion, says Ryan Ferguson Young, who tracks mergers and acquisitions data for the Calgary-based corporate advisory services firm.

The bad news? The big jump — inflated by Suncor’s $8.3-billion purchase of Canadian Oil Sands in February — appears to be for all the wrong reasons.

A prolonged period of weak oil and natural gas prices has pushed many producers to the brink, leaving them with crippled cash flows, impaired balance sheets, mounting asset write-downs, shrinking bank lines and limited access to equity capital.

That has prompted a pickup in distressed asset sales. Few believe the process is over yet, with oil prices backtracking again as the fall shoulder season looms.

Tack on the other issues facing Alberta’s energy sector — the long-running stalemate over new oil pipelines and the pending rollout of new carbon taxes, among other things — and it’s clear why foreign investors are taking a cautious approach toward Alberta’s key industry.