ATB Capital Markets Institutional Investor Conference - Energy

Highlights from the Energy sector.

Waqar Syed, MBA

On January 12, 2022, ATB Capital Markets hosted the second day of its 10th Annual Institutional Investor Conference, which included an introduction to ATBesg, presentations from 12 energy services companies and nine energy infrastructure companies, and a panel with the Honourable Sonya Savage, Mr. Derek Evans (MEG/Oil Sands Pathway Initiative) and Mr. Grant Fagerheim (WCP). In the full report, we highlight the key takeaways and themes discussed throughout the day.

We presented our ATBesg framework in an analyst-led presentation. Topics included the need for ESG reporting, the structure of our framework, and our ATBesg rankings in Energy Services and Energy Infrastructure industries.

Energy Services
We hosted three panels within the Energy Services sector and discussed themes including activity, service pricing, ESG, and energy transition, among a myriad of other topics. For 2022, the US could see its land rig count add 100 rigs (frontend loaded), Canada could see Q1/22 activity eclipse pre-pandemic levels (~250 rigs), and international markets have steadily been inflecting higher, with activity growth set to continue. The higher activity is leading to an overall tighter marketputting pressure on pricingwhile labour constraints are putting a limit on crew growth. Beyond conventional operations, each of our panels touched on key ESG themes that indicated that the sector is well on its way with respect to lowering emissions and positioning for energy transition. 

Energy Infrastructure
We hosted three energy infrastructure panels and the common themes presented across all discussions include capital allocation priorities, strong market fundamentals, underpinning customer support, and energy transition/sustainability positioning. Overall, a key takeaway is the return to growth-oriented capital allocation that aligns with long-term strategic positioning. Despite some modest risks noted around inflation and rising interest rates, the sector remains well supported by contracted cash flows and asset diversification.

Canada Leading the Way in CCUS
For today’s lunch panel we hosted a heavy hitting and candid panel discussion between the Honourable Sonya Savage, Minister of Energy of Alberta, Mr. Derek Evans, President & CEO, MEG and Mr. Grant Fagerheim, President & CEO, Whitecap Resources, focused on the role and opportunities for Carbon Capture, Utilization and Storage (CCUS) in Canada. Much of our discussion focused on the importance CCUS will play for Alberta’s and Canada’s ‘social license’ to responsibly produce oil, how the economics of CCUS need to make sense in order for it to work for industry (i.e. the right economic incentives need to be in place for capital allocation), and how regulatory/policy frameworks present both the biggest opportunities and the biggest risk to industry moving forward, with potential further clarity on many key CCUS issues expected to come with the 2022 Federal Budget.

Waqar Syed, MBA 720-683-6705

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