Canadian Oil Sands Stocks

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Like in other regions, Canada’s oil and gas industry is generally divided into three main segments: the upstream, the midstream, and the downstream. Companies that upstream engage in the exploration and production (E&P) of crude oil and natural gas, which require thorough searching for oil below the ground, drilling wells along the way to access those oil reserves.

In some cases, companies can mine for crude bitumen, a dense and viscous form of crude oil, like with the Canadian oil sands. They could also use an ‘in-situ’ recovery process, injecting steam and chemicals deep beneath the target ground to separate the bitumen from the sand then pump it to the surface. Unfortunately, both methods are relatively expensive compared to other traditional well-extraction methods. This makes the break-even price of oil for oil-sand producers much higher than for most traditional producers.

On the other hand, midstream companies have engagements in the storage and transportation of oil and gas, while downstream companies refine and sell finished petroleum products. The ten (10) biggest Canadian oil and gas companies are measured by TTM or the ‘trailing 12-months’ revenue. This list is limited to publicly traded companies in the U.S. or Canada, either directly or through ADRs.

Top 10 Oil Sands Stocks in Canada

Enbridge Inc. (ENB.TO)

  • Revenue (TTM): CA$50.1 billion
  • Net Income (TTM): CA$5.7 billion
  • Market Cap: CA$78.7 billion
  • 1-Year Trailing Total Return: -16.0%1
  • Exchange: Toronto Stock Exchange

Enbridge Inc. (ENB.TO) takes pride in energy infrastructure and provides energy transportation, distribution, and related services. They operate a pipeline network for crude oil, liquids, and natural gas and utilities in regulated natural gas distribution. In addition, this company also has investments in renewable energy assets and transmission facilities.

Suncor Energy Inc. (SU.TO)

  • Revenue (TTM): CA$38.3 billion
  • Net Income (TTM): CA$2.9 billion
  • Market Cap: CA$25.1 billion
  • 1-Year Trailing Total Return: -60.5%1
  • Exchange: Toronto Stock Exchange

Suncor Energy Inc. (SU.TO) is a company for integrated energy focused on the petroleum development of resource basins in the oil sands of Athabasca, Canada. They have engagements in exploring, acquiring, developing, producing, refining, transporting, and marketing crude oil.

Imperial Oil Ltd. (IMO.TO)

  • Revenue (TTM): CA$34.0 billion
  • Net Income (TTM): CA$2.2 billion
  • Market Cap: CA$9.8 billion
  • 1-Year Trailing Total Return: -62.0%1
  • Exchange: Toronto Stock Exchange

Imperial Oil (IMO.TO) is an integrated company specializing in oil and natural gas exploration, production, refining, transportation, and sale engagements. In addition, this company also does the manufacturing and marketing of various petrochemicals.

Canadian Natural Resources Ltd. (CNQ.TO)

  • Revenue (TTM): CA$24.4 billion
  • Net Income (TTM): CA$5.4 billion
  • Market Cap: CA$15.7 billion
  • 1-Year Trailing Total Return: -60.8%1
  • Exchange: Toronto Stock Exchange

Canadian Natural Resources (CNQ.TO) is an exploration and production company that deals with oil and gas. They produce synthetic oil, light and medium, bitumen, crude oil, primarily heavy, and Pelican Lake rich crude oil.

Cenovus Energy Inc. (CVE.TO)

  • Revenue (TTM): CA$21.4 billion
  • Net Income (TTM): CA$2.2 billion
  • Market Cap: CA$2.9 billion
  • 1-Year Trailing Total Return: -79.0%1
  • Exchange: Toronto Stock Exchange

Cenovus Energy (CVE.TO) is an oil and natural gas integration company engaged in developing, producing, and marketing crude oil, natural gas liquids, and natural gas. This company also refines crude oil, transports and sells refined petroleum and chemical products.

Husky Energy Inc. (HSE.TO)

  • Revenue (TTM): CA$20.3 billion
  • Net Income (TTM): -CA$1.4 billion
  • Market Cap: CA$3.2 billion
  • 1-Year Trailing Total Return: -73.8%1
  • Exchange: Toronto Stock Exchange

They are an integrated company doing engagements in the exploration, development, production, transportation, storage, and marketing of crude oil, natural gas, and natural gas liquids. Husky Energy Inc. (HSE.TO) also refines crude oil and markets refined petroleum products.

Parkland Fuel Corp. (PKI.TO)

  • Revenue (TTM): CA$18.5 billion
  • Net Income (TTM): CA$402.0 million
  • Market Cap: CA$3.6 billion
  • 1-Year Trailing Total Return: -37.7%1
  • Exchange: Toronto Stock Exchange

Parkland Fuel Corporation (PKI.TO) is an energy supplier that engages in the marketing and distribution various petroleum products such as gasoline, diesel, propane, lubricants, and heating oil. They supply and support a network of retail gas stations and offer products to a wide range of commercial, industrial, and residential customers.

T.C. Energy Corp. (TRP.TO)

  • Revenue (TTM): CA$13.3 billion
  • Net Income (TTM): CA$4.1 billion
  • Market Cap: CA$54.7 billion
  • 1-Year Trailing Total Return: 0.4%1
  • Exchange: Toronto Stock Exchange

T.C. Energy Corp (TRP.TO) is a company that deals with energy infrastructure. They also build and operate a network of natural gas pipelines, transporting natural gas from supply basins down to the following lines of local distribution companies, power generation plants, industrial facilities, and other customers. This company also owns storage facilities and power generation facilities of regulated natural gas. T.C. Energy had an announcement last March 2020 that it executed an exclusive letter of its intention to purchase the Pioneer Pipeline for $255 million.

Gibson Energy Inc. (GEI.TO)

  • Revenue (TTM): CA$7.3 billion
  • Net Income (TTM): CA$182.9 million
  • Market Cap: CA$2.3 billion
  • 1-Year Trailing Total Return: -29.8%1
  • Exchange: Toronto Stock Exchange

Gibson Energy (GEI.TO) provides integrated services to the oil and gas industry. The company has engagements in transportation, storage, blending, processing, marketing, and distribution of crude oil, condensate, natural gas liquids, water, oilfield waste, and other refined ones. In addition, they own a network of terminals, pipelines, and storage tanks.

Pembina Pipeline Corp. (PPL.TO)

  • Revenue (TTM): CA$7.2 billion
  • Net Income (TTM): CA$1.5 billion
  • Market Cap: CA$13.2 billion
  • 1-Year Trailing Total Return: -48.2%1
  • Exchange: Toronto Stock Exchange

Pembina Pipeline Corporation (PPL.TO) provides transportation and midstream services for the energy industry. They operate conventional and oil-sands pipelines, stores oil, and gather and process natural gas.

Start Your Engines: Are You Ready to Invest in Oil Sand Stocks?

Being pessimistic about Canada’s oil and gas sectors might not always be at an all-time high. However, for medium to long-term investors, these are the kind of stocks that might be considered attractive buys. Oil and gas markets, and the businesses operating within it, can be highly volatile as the said products – so opinions in and about this sector may change instantaneously and without any prior notice. The article is meant to stimulate discussion for views and analyses about natural oils and gases. For the record, however, this is not solicitation of any form but rather only helpful recommendations and investment advice involving the trade of oil and gas stocks, futures, options, or products. So, today’s article is meant to guide you in your investment choices, and we only wish one thing – your success in what endeavour you might put your heart into as you become the best version of yourself.

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Oil sands, also known as tar sands, crude bitumen or bituminous sand, are a type of unconventional oil resource. Oil sands extraction and treatment produce synthetic crude oil and bitumen for operation. According to the WEC, oil sands with a gravity of fewer than 10 degrees API and a reservoir viscosity of more than 10,000 centimetres are among the world’s oil reserves. In addition, new technologies allow profitable extraction and processing with high oil prices.

Upstream companies explore and produce E & P (crude oil and natural gas), which includes searching for oil in the ground and drilling wells to gain access. In the case of such Canadian oil sands companies, the extraction of crude bitumen (a dense, viscous form of crude oil) involves an in the situ recovery process, in which vapour and chemicals are injected into the soil to separate the bitumen from the sand and then pump it to the surface. This method is expensive compared to traditional good extraction, but it can raise the oil price for producers of oil sands or break it down, which can be much higher than conventional producers.

Suncor Energy is involved in developing and upgrading oil sands in the Athabasca Basin of Alberta, offshore oil and gas production off the east coast of Canada, and operations in Britain, Norway, Libya, and Syria. The refining and marketing segment transports crude oil and refines and markets petroleum and petrochemical products in Canada. In addition, Suncor refines crude oil products and sells them under the Petro-Canada brand at retail outlets throughout the country.

It holds a 25 percent stake in Syncrude, one of the world’s largest oil sands companies. Canadian Oil Sands Limited is a Canadian company that generates revenue from its oil sands investments through the SynCrude joint venture. The Syncrude joint venture operates oil sands facilities that extract crude oil from tar sands deposits in the Athabasca region in northern Alberta, Canada.

Suncor Energy is one of Canada’s leading integrated oil and gas companies. Its assets include its Montney operations in northeastern British Columbia, Pembina, and Cardium, Alberta. Imperial Oil (IMO.TO) is an integrated company engaged in the exploration, production, affinage, transportation and sale of crude oil and natural gas.

The Investing News Network has compiled the top five Canadian oil and gas stock companies using TradingView stock screeners. The shares on the list have a dividend yield of over 3 percent and a leverage ratio (total equity divided by total liabilities) of 0.71 or less.

That’s a nice mix compared to much of the energy industry’s stock market. Moreover, the energy sector offers investors attractive dividend payouts. Finally, do not forget that rating agencies prefer oil and gas to vertically integrated companies, which value them more financially.

Suncor operates a manufacturing business as well as exploration and production operations. As a result, it can spend enough to sustain production and maintain its dividend, even if oil prices fall below $45 a barrel as measured by West Texas Intermediate.

The company sees annual operating profit growth of 5% through 2023, driven by a $1.5 billion program to reduce operating costs and efficiency. Little says the company is focused on operating costs to reduce the cost of producing a barrel of oil sands crude in its main U.S. plant from $20 a barrel in 2008 to $36 with the goal of $15 a barrel. Analysts say the company is spending 30% to 40% of its annual cash flows to keep its oil production.

“We expect that Canadian supply is to increase by 2030 to 6.3 million barrels of oil per day and increase over the next decade by one million barrels per day,” he said. He sees undervalued stocks, including a broad ditch for Enbridge and a narrow ditch at T.C. Energy and Canadian Natural Resources.

Canadian Natural Resources is not particularly impressive at the front of the integrated value chain. However, Canada is the largest producer of natural gas and operates in the U.K. sector in the North Sea and off the coasts of Ivory Coast and Gabon. This oil orientation is a plus at a time when many U.S. rivals are exposed to a weak natural gas market.

When oil prices rise, the problems with Canada’s pipeline resurface. Refineries on the U.S. Gulf Coast are also struggling with declining imports from Venezuela and Mexico, a trend that is expected to continue. However, the oil sands industry has proved resilient, with many existing projects generating free cash flow at oil prices per barrel (WTI) at West Texas Intermediate (WTI) prices.

However, the bizarre situation will not last long as Canadian oil and gas stocks have reached an all-time low like many of their global counterparts. Moreover, Canadian valuations have fallen due to deep and long-standing problems transporting crude from the oil-rich landlocked province of Alberta and the port of British Columbia to lucrative East Asian markets and logistical and capacity issues that will take longer to resolve. As a result, a hostile $32.9 billion takeover bid for Suncor Energy followed in March and April 2015.

They recovered in 2009 as the economy recovered, but a surge in U.S. shale production triggered a crash in 2014. Only recently has a semblance of normality returned to global markets.

A coalition of leading Canadian oil sands producers has announced cooperation to achieve net-zero greenhouse gas emissions from their operations by 2050, even as they face challenges in meeting the country’s energy transition goals. The agreement follows the introduction by the governments of Canada and Alberta of a substantial package of assistance for emissions reduction and infrastructure projects.

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