Imagine banking on a future boom while prices crater to historic lows. That’s the bold bet two of Canada’s natural gas giants are making right now.
According to PressReader, this week, Tourmaline Oil Corp. and ARC Resources Ltd., major players in Canada’s energy sector, unveiled ambitious growth plans, shrugging off Western Canada’s natural gas prices hovering near 40-year lows.
Let’s start with Tourmaline Oil Corp., Canada’s top natural gas producer. They announced a hefty production increase, targeting a 30% jump by 2031. Their goal? A staggering 850,000 barrels of oil equivalent per day (boe/d), up from about 629,265 boe/d in the first half of this year.
To hit that mark, Tourmaline is pouring resources into new gas plants and transportation infrastructure. They’re also betting big on a $350 million investment in the Montney shale gas region of northeastern British Columbia.
Adding to their momentum, Tourmaline sealed an eight-year supply deal with German energy firm Uniper SE. Starting in November 2028, they’ll deliver 80,000 million British thermal units per day (Mmbtu/d) to U.S. Gulf Coast export terminals. It’s a clear signal they’re eyeing global demand.
Tourmaline’s leadership is optimistic, aligning their strategy with forecasts from TC Energy Corp. and others predicting a North American natural gas demand surge in the coming decade. Why play it safe when the long game looks this promising?
Meanwhile, ARC Resources Ltd., a key rival, isn’t sitting idle. They’re boosting their capital spending for the year and speeding up development at their Attachie project, also in northeastern British Columbia.
ARC is also finalizing an acquisition from Strathcona Resources Ltd., further solidifying its footprint. But they’re not ignoring the brutal market reality—natural gas prices in Western Canada are so low they’re described as “well below” the cost of extraction, processing, and transport.
To protect their bottom line, ARC made a tough call: shutting in all dry gas production, roughly 60,000 boe/d, until prices rebound. It’s a pragmatic move in a market punishing inefficiency.
ARC’s Chief Financial Officer Kris Bibby didn’t mince words on a recent earnings call. “Prices are currently ‘well below’ the cost,” he said, highlighting the industry’s pain point. Bibby also noted a refusal to squander resources at a loss. “We just refuse to waste the resource,” he added, emphasizing patience for better returns.
Yet, ARC sees light ahead, expecting price recovery later this year and into 2026 as LNG Canada’s B.C. coast terminal reaches full capacity. It’s a calculated wait-and-see approach.
For investors, this story is a masterclass in balancing risk and reward. Tourmaline’s CEO, Mike Rose, captured the mindset perfectly: “We will be a materially larger, more profitable company” when supply tightens. Their flexibility to slow or speed up based on price trends is a lesson in adaptability.
These companies are playing a long game, but short-term pain is real. If you’re eyeing energy stocks, consider firms with strong balance sheets to weather low prices. Diversify, stay frugal, and watch North American demand signals closely.
The free market is speaking—low prices weed out the weak, but bold moves like these could build wealth for those who endure. Tourmaline and ARC are betting on a future where natural gas reigns. Will you bet alongside them, or wait for the dust to settle?