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Canadian oil and fuel corporations have maintained some resilience even amid current world turmoil as their southern neighbour initiates a commerce warfare and inventory markets and crude costs slide.
Saturn Oil and Fuel, Stampede Drilling and Arrow Exploration are among the many 100 most quickly rising corporations within the Americas, in line with a 2025 Monetary Instances rating. Saturn was the trade’s quickest rising firm within the area, putting fifth total, after it posted a compound annual development charge of 353 per cent between 2020 and 2023.
The sturdy development comes at a time when Canada is debating methods to produce extra vitality for the US and past. “The basics are sturdy; the enterprise case is there,” Lisa Baiton, the chief government of Canadian Affiliation of Petroleum Producers, stated at an investor convention in Toronto in April.
Stampede and Arrow are banking on Canada’s renewed curiosity in oil and fuel together with a push to diversify markets in response to the Trump administration’s threatened tariffs and the nation’s over-reliance on the US. Stampede had 14 out of its 19 rigs operational within the first quarter whereas Arrow has elevated from 13 initiatives in 2024 to plans to drill 23 wells this yr.
Oil costs nevertheless have fallen in current months, with a greater than 10 per cent drop for the reason that starting of April, as President Donald Trump has issued quite a lot of tariff threats.
Calgary-based John Jeffrey, Saturn’s chief government, factors to a disciplined company hedging technique that has mitigated dangers in opposition to oil worth volatility and offered the corporate with some monetary stability regardless of the market turbulence.
“In 2022, when oil was $120 a barrel, we hedged out three years of manufacturing as a result of we actually preferred that worth,” Jeffrey says. “Positive sufficient, oil got here down, and that hedge began paying an enormous amount of cash.”
Saturn locks in oil and pure fuel costs on a portion of manufacturing, utilizing monetary by-product commodity contracts, usually futures, choices, or swaps, Jeffrey says.
This “prudent threat method” together with vital development in belongings, manufacturing and money movement since 2020 has helped insulate the corporate from Trump’s commerce insurance policies or the influence of sanctions on Russian crude exports, he says. Saturn final yr acquired extra belongings in Saskatchewan at a worth of $525mn.
In March, Trump imposed quite a lot of tariffs on Canadian items, together with a ten per cent levy on vitality and potash exports. He backtracked quickly after with an exemption by way of the US, Canada and Mexico commerce settlement. Weeks later his plans for widespread tariffs sparked a two-day $5.4tn world market rout that depressed Saturn’s share worth by 12 per cent.
“I hate tariffs; [they’re] going to harm a whole lot of Canadian households,” Jeffrey says. However, “these tariffs have executed one factor and that’s pushed down the Canadian greenback. I receives a commission in US [currency].”
A weak Canadian greenback, which has dropped as a result of US tariffs, is benefiting these within the trade who’ve extra scope to pay down debt and canopy working prices and salaries from income earned in US forex.
Canada, which has the world’s third-largest oil reserves, is the most important international provider to the US, accounting for about 60 per cent of its oil imports. These have grow to be more and more necessary to ageing US oil refineries, which have been constructed to deal with heavier grades of crude.
About 80 per cent of Saturn’s oil reserves are lighter crude from Saskatchewan province whereas the remainder is from neighbouring Alberta, which is taken into account residence to Canada’s petroleum trade.
“Saskatchewan is a serious oil producer,” says Heather Exner-Pirot, the director of vitality, pure assets and setting on the Macdonald-Laurier Institute in Ottawa. If the province “have been an Opec nation it will rank eleventh in manufacturing”.
Saturn’s manufacturing has soared from 7,500 barrels a day in 2022 to 41,900 bpd on the finish of 2024. Jeffery says the benefit of sunshine crude oil is decrease capital expenditures and working prices.
“If we get up and it’s $50 oil tomorrow, we’ll simply cease drilling,” he says. “Saturn has no drilling commitments or obligations, and the oil, it’s not going anyplace.”
Belt-tightening has “diminished their transportation prices by 36 per cent over the past 4 years”, Jeffery provides.
Saturn has had luck too. In February 2022, it purchased the Ridgeback Assets for $525mn when the asking worth was $1bn. “We’ve been fortunate within the sense that we’ve had the flexibility to get these belongings at very low costs.”
