Energy Sector Survey Highlights Optimism and Growth in Canadian Energy Industry

• Over half of energy services executives anticipate improved activity levels, and a striking 88% of E&P executives report a positive outlook for the sector
• Four out of five executives polled expect production growth and higher activity levels in 2024
• More than two-thirds of survey respondents identify federal energy and environmental policies and regulations as the primary concern but also see significant opportunities in the West Coast LNG expansion and the revival of a major oil pipeline project

Calgary – The Fall 2023 Energy Sector Survey conducted by ATB Capital Markets Inc. (“ATB Capital Markets”), the capital markets arm of ATB Financial, reveals renewed optimism within the Canadian energy industry since earlier this year. 60% of energy services executives polled are anticipating an upswing in activity levels over the next six months, while a remarkable 88% of Exploration and Production (“E&P”) executives are reporting an increasingly positive outlook for the sector over the same period.

"Given our extensive coverage of the energy space, ATB Capital Markets is able to offer a distinctive vantage point on insights into the energy sector,” said Darren Eurich, CEO of ATB Capital Markets. “This allows us to regularly gauge industry sentiment and leverage the in-depth market knowledge of our analysts to provide clients with a comprehensive industry overview in addition to the latest market analysis."

"The energy industry in Canada is showing a promising trajectory as optimism within the sector is complemented by a growing confidence in crude oil prices and increased investment in exploration and development,” said Tim Monachello, Managing Director, Institutional Research, Energy and Industrial Services and Technology.“The findings of the Fall 2023 Energy Survey are a testament to the sector’s resilience and adaptability, positioning it for sustainable growth as it continues to adapt to evolving stakeholder interests."

Conducted between September 18 and October 02, 2023, the semi-annual survey collected valuable insights from executives representing 30 energy services companies, 26 exploration and production (E&P) companies, and 29 institutional investors.  Included in the responses were their perspectives on the sector, outlook for the upcoming year, significant challenges faced, opportunities, and emerging industry trends. Notable among the survey's findings are:

Moderate Growth Predicted for 2024:
Looking ahead to 2024, despite lingering uncertainties stemming from macroeconomic factors, respondents collectively anticipate a year of moderate growth for the Canadian energy industry.

According to the survey, an overwhelming 88% of E&P executives expect production growth in the next 12 months. More than half (58%) foresee an increase in exploration and development spending in 2024 compared to 2023, including 35% of E&P respondents expecting to spend over 10% more in 2024.

Energy services respondents share a similar sentiment, with a large majority of 90% anticipating higher activity levels in 2024 compared to 2023, assuming a WTI price range of $85-$95 per barrel. Of these respondents, 47% expect activity to increase by 5%-10% year-on-year.

Industry Risks and Opportunities:
Survey participants highlighted federal energy and environmental policies and regulations as the primary concern for the medium-to-long-term outlook of the Canadian energy industry, with 68% expressing concern. The second most prominent risk identified was "access to capital/cost of capital" with over a third (35%) ranking it among the top two risks facing the industry.

On the other hand, the "West Coast LNG expansion" emerged as the leading medium-to-long-term opportunity for the energy sector, perceived as such by more than half (61%) of energy executives and institutional investors. This was followed by the "revival of a major oil pipeline project" and "carbon capture and sequestration" as the second and third most prominent opportunities, respectively.

Energy Sector Poised for Hiring:
The survey results also underscore a positive hiring trend within the energy industry, with 46% of energy companies surveyed expecting to increase their headcount over the next six months, while only 5% anticipate a reduction in their workforce. Expressing concern over access to services and labour, over half (57%) of service companies support this view, with 70% expecting wages to rise in the next six months.

To request the full report, please contact your ATB Capital Markets representative.

About ATB Financial
With $58.3 billion in assets, ATB Financial is a leading financial institution that started in Alberta with the focus of putting people first. Our success comes from our more than 5,000 team members who love to deliver exceptional experiences to over 800,000 clients across our Personal and Business Banking, ATB Wealth Management and ATB Capital Markets businesses. ATB provides expert advice, services and products through our many branches and agencies, our 24-hour Client Care Centre, four entrepreneur centres and our digital banking options. ATB powers possibilities for our clients, communities and beyond. More information about ATB can be found at atb.com.

About ATB Capital Markets
ATB Capital Markets offers holistic corporate and capital markets advice, combined with customised financial solutions to help businesses thrive. We’re a full-service investment dealer for key industries on the cusp of a new era. Established in 2020, ATB Capital Markets helps clients with services that include investment and corporate banking, sales and trading, institutional research, and risk management.

ATB Capital Markets Inc. is Broker/Dealer #03 on the Toronto Stock Exchange.

For more information about ATB Capital Markets Inc. visit www.atbcm.atb.com.