U.S. Investment in Canadian Energy Firms Surges Despite Low Oil Prices

The trend of U.S. investors increasingly purchasing shares in Canadian oil and gas companies continues, even as global oil prices decline. According to data from McCrea, U.S. funds now account for approximately 59% of ownership in Canadian oil and gas companies, a rise from 56% at the end of 2024. In contrast, Canadian investments in these companies have decreased to 34% from 37% during the same period.

The shift in ownership highlights a growing interest among American investors, particularly in firms like Tamarack Valley Energy. Its CEO, Brian Schmidt, noted that U.S. ownership of his company has doubled to 40%, up from 20% prior to the COVID-19 pandemic. Additionally, nearly two-thirds of Whitecap Resources is now owned by U.S. investors, compared to 60% at the end of last year.

The increase in U.S. investment is attributed to several factors. Canada’s political landscape has shifted under the leadership of Prime Minister Mark Carney, who is more receptive to fossil fuel investments compared to former Prime Minister Justin Trudeau. Trudeau’s administration focused on clean energy initiatives, such as funding electric vehicle infrastructure, implementing a national carbon tax, and placing a moratorium on oil and gas drilling in the Arctic.

The completion of the Trans Mountain Pipeline expansion has also significantly boosted confidence in Canada’s oil and gas sector. With a total capacity of 890,000 barrels of oil per day, the expanded pipeline has nearly tripled the previous system’s capability. Since its commercial operation began in May 2024, it has operated at approximately 82% of its maximum capacity. The pipeline transports crude from Edmonton, Alberta, to the Westridge Marine Terminal in Burnaby, British Columbia, facilitating shipments to global markets, particularly in the Asia-Pacific region.

Canadian oil sands are particularly attractive to investors due to their lower breakeven costs. The average breakeven price for Canada’s oil sands ranges between $40 and $57 per barrel, with some large producers achieving even lower costs. This cost efficiency allows Canadian producers to remain profitable even when many U.S. shale companies struggle.

The performance of the Canadian energy sector reflects this resilience. The TSX Energy Index has risen 19.5% year-to-date, outpacing the S&P 500 Energy Index, which has gained 6.0% in the same timeframe. Several Canadian energy stocks are notable for their impressive market performance.

Top Performing Canadian Energy Stocks

Falcon Oil & Gas leads the pack with a market capitalization of $150.1 million and year-to-date returns of 147.2%. The company has been active in the acquisition and development of oil and gas assets across Australia, South Africa, and Hungary. Its ongoing work on the Shenandoah South Pilot Project in Australia is poised to commence gas sales by mid-2026, contributing significantly to its growth.

Another standout, Tamarack Valley Energy, boasts a market cap of $2.7 billion and year-to-date returns of 66.0%. The company’s strategic focus on responsible energy development, coupled with strong operational results and financial discipline, has driven its success. Tamarack’s high-performing assets, particularly in Alberta’s Clearwater play, have resulted in increased production and free cash flow.

Imperial Oil Ltd., with a market capitalization of $49.0 billion, has seen year-to-date returns of 61.9%. This integrated energy company excels in petroleum and natural gas production, refining, and marketing. Its recent performance has been fueled by record upstream production and operational efficiency, allowing it to outpace many of its peers.

NuVista Energy Corp. has a market cap of $2.6 billion and year-to-date returns of 38.6%. The company’s strategic focus on the condensate-rich Montney formation has been a key driver of its stock performance, along with effective financial management.

Lastly, Peyto Exploration & Development Corp. has achieved a market cap of $3.2 billion and returns of 34.7% this year. The company’s strong operational efficiency and strategic diversification in natural gas have allowed it to maintain high margins and return capital to shareholders, even amid fluctuating commodity prices.

The Canadian energy sector’s growth trajectory, supported by favorable investment shifts and a solid operational foundation, positions it uniquely in the global market. As U.S. investors continue to increase their stakes, the landscape for Canadian oil and gas companies appears promising.