The spring 2024 edition of the ATB Capital Markets Energy Sector Survey* came out yesterday.

Key findings include:

• Sentiment remains healthy, but has weakened - Despite general optimism and expectations for mild year-over-year growth in capital spending, production, and energy services activity in 2024, the outlook has moderated since the fall 2023 survey.
• Oil prices expected to remain robust - Some 91% of respondents expect West Texas Intermediate crude prices to average above US$75.99 over the next three to five years.
• Natural gas prices expected to rise - At 77%, a majority of survey respondents expect NYMEX natural gas prices to improve over the next 12 months.
• Severe drought a concern for energy services companies - Although a majority of exploration and production company respondents viewed the potential impact as “marginal” to 2024 development plans, a majority of energy service company respondents viewed it as “significant.”
• Medium-term outlook bolstered by major infrastructure projects - The Trans Mountain pipeline expansion (TMX) and the LNG Canada export facility in Kitimat, British Columbia were identified as fundamental drivers of growth.
• Growth tops E&P priorities - Alongside egress additions and improved balance sheets, 52% of E&Ps ranked growth as their top capital allocation priority up from just 8% in the fall 2023 survey. 
• TMX enough for now - The industry expects the added capacity from TMX will be sufficient to meet growing supply until at least 2028.
• Liquid natural gas exports seen as a driver of activity - A majority of energy services companies expect Canadian LNG exports to be a significant driver of activity in 2025 and 81% of all respondents expect LNG Canada phase 2 to move forward.
• Role of artificial intelligence - About 8 in 10 respondents believe AI technologies will have a marginally positive impact on their companies over the next three to five years.
• Federal policies remain top risk - For the fourth consecutive survey, “federal energy and environmental policies and regulations” topped the ranking of perceived risks to the Canadian energy sector over the next three to five years with 74% of respondents ranking it as the top risk (up from 68% in the fall 2023 survey) and 97% ranking it as a top-three risk (up from 94% in the fall survey).

*Conducted April 4-18, 2024, the survey collected responses from executives representing 24 energy services companies, 26 exploration and production companies, and 30 institutional investors.

Answer to the previous trivia question: The U.S. Energy Information Administration was created in 1977 “as the primary federal government authority on energy statistics and analysis, building upon systems and organizations first established in 1974 following the oil market disruption of 1973.”

Today’s trivia question: When talking about drilling rigs, what is the “monkeyboard.”