David Szybunka, senior portfolio manager and managing director of the energy team at Canoe Financial LP.Colin Way/The Globe and Mail
Growing up on a farm north of Edmonton, David Szybunka drove a tractor to plant crops and feed the cattle as part of his chores. That life also gave him insight that would later be useful as an energy fund manager. He got to see the peaks and troughs in farming, a commodity business just like the oil and gas industry. Armed with a business degree, he was hired during the oil bull market in 2007 as an associate by Peters & Co., a Calgary energy investment boutique. He joined Canoe Financial as an analyst in 2011 and now oversees $2.4 billion in energy funds. That includes Canoe Energy Portfolio Class, which has outpaced the S&P/TSX Capped Energy Total Return Index since 2020, when he began managing the fund. We asked Szybunka how oil and gas stocks can rally amid weak commodity prices and why he likes Tourmaline Energy.
How do you beat your index given volatile oil and gas prices?
People often translate volatile to risky, but there’s less risk in energy companies now. They have less debt. They spend 40% to 60% of their cash flow, with the rest going to dividends or share buybacks. Suncor and Canadian Natural Resources make up half of the index, which is 80% in oil stocks. But we also invest in alternative energy, infrastructure, LNG, refining and related transportation companies. It helps to have boots on the ground to get the day-to-day narrative from friends in the business. We’ll also look at foreign energy stocks. In 2024, we owned some U.S. natural gas and power companies.
How did your fund outperform last year, when commodity prices were falling?
Weaker energy prices don’t necessarily hurt their stocks. Our fund benefited from owning mostly intermediate firms and merger-and-acquisition activity, too. Last fall, MEG Energy was taken out by Cenovus. And U.S. energy producer Ovintiv did a deal to acquire NuVista Energy. The thinking now is, who’s next? Private equity and U.S. energy players are now sniffing in our backyard. That’s why shares of Athabasca Oil, an oil sands producer, and Tamarack Valley Energy and Headwater Exploration, which focus on Alberta’s highly profitable Clearwater heavy oil play, did well last year. Scarcity of quality resources in the Western Canadian Sedimentary Basin is a multiyear theme.
The U.S. vowed to rebuild Venezuela’s heavy oil industry after abducting its president, Nicolás Maduro, in January. Is that oil a threat to Canadian energy firms?
The U.S. produces and exports light shale oil, but many of its refineries are built for heavier grades, which come from countries like Venezuela and Canada. It’s a smart move for the U.S. to take over Venezuela’s heavy oil industry, but the market is wrong in seeing it drastically hurting Canadian energy companies. The U.S. needs oil from both countries. I expect another oil pipeline will eventually be built to the U.S. from Canada. At the end of the day, the U.S. wants more oil for energy security.
Shares of Tourmaline struggled in 2025, but it’s your biggest holding. Why?
Most investors want dividends and share buybacks from energy stocks instead of growth. But Tourmaline’s smart management is focused on buying assets at attractive prices, particularly in the Montney gas play in B.C. One day, it could sell that resource to one or more energy players at a much higher price because the world needs more gas. That’s part of the scarcity-of-resources theme, which the market isn’t focused on enough. Tourmaline has never been more vulnerable to having a bid as today.
Where else do you see opportunities now?
CES Energy Solutions, a provider of chemicals for oil and gas drilling, is a capital-light business and is gaining market share. It has 25% of the U.S. market, up from 15% five years ago. It benefits from energy companies drilling longer and more horizontal wells, which require more chemicals. We also like PraireSky Royalty, which has exposure to royalties from Spur Petroleum in the Clearwater oil play, and Topaz Energy, a royalty and infrastructure company spun out of Tourmaline.