American crude oil production may be experiencing a Trump slump.Todd Korol/Reuters
Inspired by persistent insider buying of oil patch stocks, we have been making the case since early May that Canadian oil stocks with long-life assets should start to grab the attention of global investors. The theme is gaining traction as the growth outlook for U.S. onshore oil production becomes increasingly uncertain.
Donald Trump returned to the presidential office this year, promising to “drill, baby, drill.” But instead of a Trump pump, American crude oil production may be experiencing a Trump slump. Depending on data sources used, onshore U.S. crude oil production growth, excluding natural gas plant liquids, appears to be slowing or even stagnating.
The Canadian long-life theme started to gain traction on May 15 when Strathcona Resources Ltd. SCR-T made a hostile bid for thermal oil producer MEG Energy Corp. MEG-T which boasts a proved and probable (2P) reserve life index (RLI) of about 50 years. More than five months later, the MEG drama is still playing out. Strathcona dropped its bid on Oct. 10 and on Monday said it would support a sweetened bid from Cenovus Energy Inc. CVE-T worth about $30 per MEG share.
Shareholders will vote on the Cenovus offer on Thursday. If the Cenovus bid proceeds, the deal could net Strathcona a nice profit of about $17.5-million on the 12.7-million MEG shares it purchased between Sept. 2 and 4. That would be in addition to any profit potentially realized on the 23.4-million MEG shares already held at undetermined prices.
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Strathcona is majority owned (79.6 per cent) and controlled by the entities forming the Waterous Energy Fund (WEF). The management of WEF is indirectly owned and controlled by Adam Waterous.
WEF also has an approximate 55.9 per cent stake in heavy oil producer Greenfire Resources Ltd. GFR-T. Greenfire’s principal assets are the Hangingstone Facilities, which consist of two steam-assisted gravity drainage (SAGD) oil production facilities: the Expansion Asset (75 per cent working interest) and the Demo Asset (100 per cent working interest). They are located about 50 kilometres south of Fort McMurray, Alberta.
Greenfire reported 2024 year-end 2P reserves of 408.6 million barrels with a 58-year RLI. Greenfire’s average second-quarter production was 15,748 bbls/d, down from 18,993 bbls/d in Q2 2024. The failure of one of the four steam generators at the Expansion Asset in Q1 has reduced production by between 1,500 and 2,250 bbls/d. The company is targeting to be back at full production by the end of the year. As of June 30, the company reported net debt of $216-million.
On Feb. 11, Mr. Waterous was appointed executive chairman, and Colin Germaniuk became Greenfire’s president. Mr. Germaniuk has been buying shares in the public market since his appointment, with his most recent activity taking place between Oct. 8 and 10 when he bought 94,838 shares at $6.50. He now holds 131,882 shares. With Greenfire’s share price down 30.9 per cent so far in 2025 as of Monday, the stock is hitting our screens as a potential contrarian heavy oil play.
Rubellite Energy Corp. RBY-T is also focusing on heavy oil in the Clearwater play area, north of Edmonton. Rubellite sports a different oil patch pedigree, led by CEO Sue Riddell Rose. In Q2, the company reported heavy oil sales production of 8,637 bbls/d, up 92 per cent from 4,503 bbls/d a year earlier. Total Q2 production was 12,425 barrels of oil equivalent (boe) per day, which includes 3,268 boe/d in natural gas and natural gas liquids production from East Edson in the Deep Basin, operated by Tourmaline Oil.
The company reports an RLI ranging between 7.6 years in proved developed producing reserves to 22.8 years of total 2P reserves. Rubellite expects heavy oil sales volumes to grow 44 per cent to 48 per cent year-over-year to average between 8,200 and 8,400 bbl/d in 2025, while total production sales volumes are forecast to average 12,200 to 12,400 boe/d for the year. As of June 30, the company reported net debt of $142-million.
The stock climbed a bit higher in our rankings in early fall after Ms. Riddell Rose purchased 50,000 shares at $2.20 on Sept. 23. She now holds 39.7 million shares, or 42.5 per cent of all shares outstanding, another factor that helps support the stock in the INK rankings.
Tamarack Valley Energy Ltd. TVE-T also has exposure to Clearwater heavy oil where it believes it has more than 11-billion barrels of original oil in place. The stock year-to-date was up 33.2 per cent as of Monday.
In Q2, Clearwater production increased 16 per cent YoY to average 46,486 boe/d (90 per cent heavy oil). Net debt as of June 30 stood at $711-million. Tamarack expects company-wide production in 2025 to be between 67,000 and 69,000 boe/d which, in addition to Clearwater, includes its Charlie Lake light oil and various enhanced oil recovery assets.
The stock is helped by continued insider public market buying. For example, in September, a pair of directors bought a total of 42,675 shares in the public market at an average price of $5.57. That month, the company also repurchased just over 2.8 million shares at an average price of $5.84.
Disclosure: The author holds shares in Rubellite Energy.
Ted Dixon is CEO of INK Research which provides insider news and knowledge to investors.