The Best Little Oil Companies in Canada
FIFTEEN YEARS AGO IT WAS COMMON KNOWLEDGE THAT OIL AND GAS
Who are the top juniors of the past, present and future?
production in North America was in terminal decline. After decades of exploration, all of the profitable onshore oil and gas in Canada and the U.S. had already been discovered.
As a result, the majors set their sights elsewhere in search of reserves that could move the needle for them. The big boys of the business looked to riskier locales like Africa and Kurdistan as places where large amounts of hydrocarbons could still be discovered. Other areas of attention for the majors were far offshore in the deep ocean or way up north in the Arctic.
While the attention of the majors was elsewhere, close to home something happened. Small companies run by entrepreneurial management teams cracked the code on vast amounts of oil and gas located here in North America. These management teams didn’t really have any options—they didn’t have the deep pockets to chase elephants elsewhere.
Through trial and error, and with some help from higher oil and gas prices, it was a group of independent producers who figured out how to economically extract energy from poor quality rocks. Drilling horizontally allowed companies to stay in contact with oil and gas formations over longer distances. Fracking these formations opened up those rocks and kept them propped open to allow for oil and gas to flow.
The corporate caretaker mentality of the majors wasn’t attuned to this new age of oil and gas production. It was, instead, the entrepreneurial mindset of the small, independent operators.