Survey shows E&Ps and services boost 2026 production and capex while policy, pipeline risks persist
Canadian energy producers, services firms, and institutional investors are lining up behind a similar 2026 view: higher production, more growth capital and a tilt toward Canadian energy equities.
ATB Cormark Capital Markets’ Spring 2026 Energy Sector Survey shows a more constructive outlook across exploration and production (E&P) companies, energy services firms and institutional investors for the next 12 months compared with fall 2025.
Institutional sentiment shifted toward energy.
Among buyside respondents, 82 percent said they had become more bullish on energy investments over the past six months.
In addition, 76 percent expect Canadian energy equities to outperform the broader market over the next 12 months, and 76 percent view Canadian public energy equities as undervalued or very undervalued.
A slight majority of institutional investors also said recent crude price strength tied to Middle East unrest has made them more willing to invest in Canadian energy equities.
Darren Eurich, CEO at ATB Cormark Capital Markets, said their spring 2026 survey shows “a meaningful improvement in the outlook for the Canadian energy sector compared with fall 2025.”
He said more institutional investors are “becoming more bullish on energy” and expect Canadian energy equities to “outperform the broader market over the next 12 months.”
Although he noted ongoing policy and infrastructure constraints, Eurich said the results show investors now see “a stronger backdrop for Canadian energy companies” than six months ago.
Growth has emerged as the top 2026 priority.
Public E&Ps ranked growth capital spending as their top capital allocation priority, while public energy services companies also moved growth capital spending into the top spot.
E&P exploration and development spending is projected to rise by roughly 4 percent year over year on a production-weighted basis.
Among E&P respondents, 95 percent expect production to grow over the next 12 months, up from 88 percent in the fall 2025 survey.
On a production weighted-average basis, both oil- and gas-weighted producers expect production growth of roughly 6 percent over the next year.
Energy services respondents report improving conditions.
In the spring 2026 survey, 75 percent of services respondents said they expect higher customer activity in 2026 compared with 2025, implying approximately 4 percent year-over-year activity growth, which aligns with E&P capital spending expectations.
Energy services margin expectations also turned positive for the first time since fall 2023.
With 2026 crude prices tracking above most producer budget assumptions, E&Ps indicated that incremental cash flow is most likely to be directed toward deleveraging and increased drilling and completions activity, followed by additional shareholder returns.
Tim Monachello, managing director at ATB Cormark Capital Markets, said the survey indicates the industry is heading into 2026 with “stronger underlying momentum.”
He said investors expect more field activity, broader production growth and better pricing and margins for energy services, even as capital budgets rely on “relatively conservative” oil price assumptions.
He added that sustained “elevated crude prices” could be a “meaningful tailwind” for Canadian activity, E&P growth, balance sheets and shareholder returns.
For the eighth consecutive survey, federal energy and environmental policy ranked as the top risk facing the sector.
A larger minority of respondents now believe the Carney administration will actively work to expand the Canadian energy sector compared with the fall 2025 survey.
Pipeline capacity constraints ranked as the second most prominent medium-term risk, up from third in the fall 2025 survey.
Two-thirds of respondents with a view expect Canada to face crude pipeline capacity constraints before 2029.
Perceived likelihood of a Keystone XL revival increased, and respondents now view it as the most likely cancelled pipeline project to be revived.
West Coast LNG expansion remains the top-ranked medium- to long-term opportunity for the Canadian energy sector.
Most respondents still expect positive final investment decisions for LNG Canada Phase 2 and Ksi Lisims LNG, although expectations for timing have shifted further into the future and expectations for positive FIDs have softened.
The perceived risk from OPEC+ supply additions and global oversupply fell materially in the spring 2026 survey.
At the same time, companies continue to scale back ESG disclosure and transition-related investment plans, with carbon capture and sequestration investment intentions falling to the lowest level in survey history.
