Industry Leaders and Sector Experts Share Strategic Insights and Future Growth Opportunities

Sept. 24, 2024 - ATB Capital Markets Inc. ("ATB Capital Markets"), the capital markets arm of ATB Financial, hosted its Fall 2024 Energy and Life Sciences Institutional Investor Conferences in New York City. Senior leaders from both sectors shared insights on business outlook.

"We're pleased to once again host a forum where we could bring together clients, companies, and investors to access relevant and sector-specific information alongside industry leaders," said Darren Eurich, CEO of ATB Capital Markets. "As part of this fall's program, we were honoured to have the Premier of Alberta, the Honourable Danielle Smith, deliver a keynote address. Her remarks highlighted the province's robust upstream energy industry and its role in emerging fields such as hydrogen, natural gas, renewables, and carbon capture. As these sectors progress, we remain committed to uncovering and bolstering growth opportunities for our clients."

Energy Outlook

On September 17, 2024, ATB Capital Markets hosted its 2024 Energy Institutional Investor Conference in New York City, showcasing 14 of the top oil and gas producers in the Canadian energy sector as well as a keynote speech and fireside chat with the Premier of Alberta, the Honourable Danielle Smith.

• Canadian Energy Producers Excel: Investors highlighted the strong business models of Canadian producers, which can operate profitably at lower oil prices compared to their U.S. counterparts. Additionally, Canadian energy assets offer greater value and higher free cash flow yields, ranging from high-single digits to mid-teens at $75 per barrel, compared to mid-single digits for U.S. peers. These advantages are underscored by a strong regulatory environment and improving broad political support.
• Companies Prioritise Resource Acquisition: Companies are focused on gathering large resources and maintaining robust inventories. After years of prioritising survival and debt repayment, there is renewed interest in land sales and long-term asset management.

"The Canadian energy industry continues to thrive, demonstrating exceptional resilience and profitability with record liquids production of over 4 million barrels per day in July 2024," said Patrick O'Rourke, Managing Director of Institutional Research, Exploration & Production. "There are exciting opportunities ahead, with anticipated field activity growth and mid-single digit production growth for Canadian E&Ps on average in 2025. The potential progression of LNG Canada Phase Two and the upcoming federal elections are pivotal opportunities and catalysts for the sector moving into next year."

Life Sciences Outlook

On September 18, 2024, ATB Capital Markets hosted the 2024 Life Sciences Institutional Investor Conference in New York City, bringing together management teams and institutional investors for two moderated panels that delved into regulatory catalysts, investor sentiment, and the outlook for the coming year.

• Rescheduling as a step towards broader federal reform: Both presidential candidates have expressed support for cannabis rescheduling, which investors see as a positive indicator for change within the next year. However, rescheduling alone is unlikely to change the exchanges' current stance, despite no explicit rule barring US cannabis companies from listing on the NYSE and NASDAQ. Additional measures, such as a banking bill with safe harbour language or a Department of Justice memo, are necessary for up-listings.
• Optimistic Florida polling: Polls indicate strong support for Florida's adult-use legalisation, with some showing 65 per cent-66 per cent approval. Even opposition polls reflect mid- to high-50 per cent support.
• Investor sentiment and regulatory catalysts: Investors remain cautious due to past delays and false starts in regulatory changes. They are in "show me" mode, waiting for tangible catalysts before allocating more capital, which could drive sector growth. Current valuations present an appealing investment opportunity, ahead of the potential materialisation of catalysts. Companies are focusing on building resilient, sustainable business models regardless of regulatory reform.

"Conversations at our Life Sciences conference this year revealed that the regulatory landscape for cannabis is on the cusp of transformation, with proposed changes poised to substantially impact valuations and investor engagement," said Frederico Gomes, Director of Institutional Research, Life Sciences at ATB Capital Markets. "As the market grapples with share volatility and a slowdown in industry growth, it is crucial for companies to remain vigilant and adaptable, building robust business models to navigate both opportunities and challenges, while also ensuring they are well-positioned to capitalise on emerging growth prospects."