Other oil producing jurisdictions outside North America have yet to wake up to new, disruptive operating realities. Canada’s oil and gas industry remains injured after the turmoil of 2018. Pipelines, politics and prices pummelled the psyche of stakeholders. Now the question is, “What will it take for companies to attract investors again?” If we use corporate financings as our thermometer, investor confidence is below freezing. Going back 20 years, independent oil and gas producers could count on an average $15 to $20 billion of new debt and equity coming in every year, mostly from institutional investors. Last year, the inflow was just over $1 billion. From a stock market perspective, the S&P/TSX Oil and Gas Index has fallen 42 per cent in a little over two years (since January 1st, 2017, see Figure 1 below). It’s true: much of that is due to price discounts in a pipeline-constrained region. Yet if that doesn’t scream identity crisis in a carbon-constrained world, consider that a leading exchange traded fund (ETF) for coal is up 23 per cent over the same time frame. In Alberta oil country, the canonical refrain to the question of restoring industry health and investor confidence, is “Build […]
