Maintaining Growth Trajectory as Sentiment Softens

We present the results from the fall 2024 edition of ATB Capital Markets’ semi-annual Energy Sector Survey. Our survey garnered responses from executives representing 33 energy services companies, 38 exploration and production (E&P) companies, and 39 institutional investors. Our survey collection period spanned from August 28, 2024 to September 9, 2024. Highlights include: 

Industry Charting Moderate Growth Trajectory for 2025
The fall 2024 survey provided an early glimpse into the outlook for 2025 including a view to 1) expectations for 3%-5% field activity growth in 2025 over 2024; 2) mid-single digit production growth for Canadian E&Ps on average; and 3) expectations of flat y/y per well development costs and marginal service price inflation. 

Sentiment Softens Amid Commodity Price Weakness
Sentiment remained generally positive on an absolute basis across E&Ps, energy services companies, and institutional investors. That said, the fall 2024 survey showed notable moderation in key sentiment indicators including 1) a more conservative view of WTI crude prices over the next three to five years, with 75% of respondents expecting WTI to average above US$75/bbl over the next three to five years, down from 91% in the spring 2024 survey; 2) a softening of E&P outlooks with 58% of E&P respondents characterizing their six-month outlook as “improving” down from 88% in the spring survey; and 3) a pull-back in investor optimism for energy equity performance with just 38% of respondents expecting energy to outperform the TSX/S&P 500 over the next 12 months, down from 67% in the spring 2024 survey, while only 26% expect energy to underperform over the period. Energy services were the only segment that observed improved sentiment in the fall 2024 survey, though energy services sentiment was the weakest of the groups during the spring 2024 survey. Nevertheless, energy services respondents on average noted improved outlooks over the past three months, and are more united in a view toward increasing activity over the next six months compared to the spring 2024 survey. 

Catalysts and Opportunities Ahead
Over the coming months, the survey highlighted a number of key opportunities and catalysts for the industry. West coast LNG development remains the consensus top opportunity for the sector, coinciding with expectations for tightening AECO basis over the coming years and tailwinds to energy services activity. In addition, the survey suggested that upcoming federal elections could be catalysts for the energy sector with respondents viewing a Republican party victory most favourably in the US election, while in Canada respondents continue to highlight “federal energy environmental policies and regulations” as the consensus top risk and changes to these policies as the third most prominent opportunity for the sector, suggesting that the next Canadian federal election could be pivotal for Canadian energy sentiment. 

Survey Data
Please see the report for a detailed overview of survey questions for each subgroup in our survey. Commentary from survey respondents can be found throughout the report. Survey methodology can be found in the full report. If your company/fund would like to participate in future surveys, please request the report for more details.