Recently, we have seen that US investors are increasingly buying Canadian oil and gas companies, even as global oil prices decline. According to McCrea, U.S. funds now own about 59% of Canadian oil and gas companies, up from 56% at the end of 2024, while investments by Canadians have fallen from 37% to 34%. The shift in investments has been even more dramatic for some Canadian companies: Brian Schmidt, CEO of Tamarack Valley Energy (OTCPK:TNEYF), revealing that American ownership of its company has doubled to 40%, up from 20% before the pandemic, while Americans own almost two-thirds of Whitecap Resources (OTCPK:WCPRF) compared to 60% at the end of last year.
There are several reasons behind this “rotation”. First, Canada’s top leaders are now very open to fossil fuel investments, and Prime Minister Mark Carney has promised to make Canada an energy superpower. In contrast, former Canadian Prime Minister Justin Trudeau was friendlier to clean energy, managing to provide money to build electric vehicles and charging stations, committing $2 billion to clean water and wastewater funds for cities, introducing a national carbon tax, allocating infrastructure funds for local governments to address climate change, and imposing a five-year moratorium on Arctic oil and gas drilling in the first two years after his election.
Second, the completion of the Trans Mountain pipeline expansion has bolstered confidence in Canada’s oil and gas sector. The expanded pipeline has a total capacity of 890,000 barrels of oil per day, which is almost three times the capacity of the previous system. Since beginning commercial operation in May 2024, TMX has been operating at ~82% of its maximum capacity. TMX transports crude oil from Edmonton, Alberta, to the Westridge Marine Terminal in Burnaby, British Columbia. From there, it is shipped to global markets, primarily the Asia-Pacific region. The pipeline also delivers oil to Washington state for local refineries and has terminals in places like Kamloops and Burnaby for regional distribution.
Related: US crude hits record as key export data darkens
Third, Canada’s tar sands have a significantly lower breakeven point and can still turn a profit at oil prices that would put most US Shale Patch companies in the red. The average breakeven oil price for Canada’s tar sands is about $40 to $57 per barrel of crude, and recent estimates suggest even lower costs for some large producers. Mid-cycle equilibrium prices may decline further, ranging between $18 and $45 per barrel. Recent cost reductions are due to technological improvements and debt reduction, making Canadian oil sands production globally cost-competitive.
It is no surprise that the Canadian energy sector is outperforming its American counterpart, with the TSX Energy Index up 19.5% year-to-date compared to a 6.0% gain by the S&P 500 Energy Index during the time period. Here are five Canadian energy stocks that have easily outperformed the market.
#1. Falcon Oil and Gas
Market capitalization: $150.1 million
YTD profitability: 147.2%
Falcon Oil & Gas Ltd. (OTCPK: FOLGF) is engaged in the acquisition, exploration and development of conventional and unconventional oil and gas assets in its portfolio, which includes projects in Australia (Beetaloo Basin), South Africa (Karoo Basin) and Hungary (Mako Trough). The company’s activities focus on the search and development of new resources through exploration and seismic studies, with the aim of bringing them to commercialization.
Falcon Oil & Gas’s strong performance is being driven by its progress on the Shenandoah South Pilot Project in Australia, which is on track to begin gas sales in mid-2026, and a recent strategic investment in Nigeria’s oil and gas sector by Energy& LLP. The company is drilling faster than expected and one well achieved a new record for horizontal section drilled, thanks to modifications to the mud system and the use of anti-vibration bits. Increased drilling efficiency in Australia and recent investment in Nigeria are expected to accelerate growth.
#2. Tamarack Valley Energy
Market capitalization: $2.7 billion
YTD profitability: 66.0%
Tamarack Valley Energy (OTCPK:TNEYF) is a Canadian oil and gas company with a long-term strategic focus on responsible, value-driven energy development. The company’s portfolio of high-quality assets comprises oil fields in Alberta and several enhanced oil recovery (EOR) opportunities.
Tamarack Valley Energy stock has performed well due to a combination of strong operating results, financial discipline, and strategic stock buybacks. Tamarack owns high-yield, low-cost assets, such as those in the Clearwater field, that drive increased production and boost free cash flow. The company has also benefited from the divestment of non-core assets, a tighter discount on Canadian heavy oil and an aggressive share buyback program that has reduced the share count.
#3. Imperial Oil Ltd.
Market capitalization: $49 billion
YTD profitability: 61.9%
Imperial Oil Ltd. (NYSE:IMO) is a Canadian integrated energy company that
explores, produces, refines and markets petroleum and natural gas products, including synthetic crude oil. The company is a major refiner and marketer of petroleum products, a large producer of crude oil and natural gas, and a major producer and distributor of chemicals. They market high-quality fuels, lubricants and other products under the Esso and Mobil brands and operate a retail network of convenience stores.
Imperial Oil Ltd shares have performed well due to its strong operating efficiency, record upstream production, integrated business model and commitment to significant shareholder returns. This performance has allowed the company to outperform many of its peers in the energy sector. IMO achieved its highest quarterly crude oil production in three decades during the third quarter of 2025, averaging 462,000 barrels of oil equivalent per day. The record flows were primarily driven by the Kearl asset, which hit a record 316,000 gross barrels per day.
#4. NuVista Energy Corp.
Market capitalization: $2.6 billion
YTD profitability: 38.6%
NuVista Energy Corp. (OTCPK:NUVSF) is an independent oil and natural gas company that
explores, develops and produces oil, natural gas and natural gas liquids in the western Canadian sedimentary basin. Its primary focus is on the condensate-rich Montney formation in the Pipestone and Wapiti areas of Alberta.
Ovintiv Inc. (NYSE: OVV). recently announced an agreement to acquire NuVista Energy Ltd. However, NuVista’s stock performance has been primarily driven by the company’s strong operational execution, industry-leading production growth, and strategic financial management, including share buybacks.
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Peyto Exploration and Development Corp.
Market capitalization: $3.2 billion
YTD profitability: 34.7%
Peyto Exploration and Development Corp.. (OTCPK:PEYUF) is a Canadian energy company focused on the exploration, development and production of natural gas, oil and natural gas liquids. The company’s operations are primarily focused in the Deep Basin area of Alberta, Canada. Generates income from the sale of these natural resources.
Peyto Exploration & Development Corp. shares have performed well due to its strong operating efficiency, strategic natural gas diversification and hedging, and low-cost production structure in the Alberta Deep Basin. These factors have resulted in high margins, significant increases in funds from operations, and the ability to return capital to shareholders through dividends and debt reduction, even during periods of lower commodity prices.
By Alex Kimani for Oilprice.com
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