While there’s no longer any reasonable doubt about the superiority of renewable energy versus fossil fuels, with research from the UK’s Climate Change Committee finding that the cost of one oil crisis outweighs the cost of ushering the island nation to net-zero emissions by 2050, the truth of the matter is that, to achieve the wide-ranging benefits of a decarbonized world, spending on low-emission infrastructure would need to increase on average by US$3.5 trillion per year, according to McKinsey, a figure we’re falling woefully short of.
As a result, although fossil fuels’ leadership on the global stage is diminishing, the shift is occurring at a glacial pace, with estimates that oil and and gas will still fulfill half of energy demand by 2050.
This article is a journalistic opinion piece which has been written based on independent research. It is intended to inform investors and should not be taken as a recommendation or financial advice.
From an investment perspective, this means that oil and gas stocks should remain an integral part of a diversified portfolio over the coming decades – barring any ESG philosophies you may subscribe to – highlighting the ongoing US/Israel-Iran war as a prospective opportunity to source your next investment. A working thesis might state that:
- The Strait of Hormuz, responsible for the safe passage of 20 per cent of the world’s oil, remains blocked by Iranian forces.
- This dynamic has led the US to block Iranian ports in a bid to weaken the country’s ability to fund itself during the war.
- Meanwhile, peace talks remain preliminary and contentious, with a tenuous 10-day ceasefire between Israel and Lebanon following more than 2,000 deaths and more than 1 million people displaced.
- An end to the war is then anything but tangible at the moment, spotlighting oil and gas suppliers in safer jurisdictions capable of signing long-term deals and making good on their promises.
Canada’s conflict-averse nature, combined with its robust oil and gas industry – among the top five largest in the world – makes for a compelling consideration here, with an abundance of fundamentally sound companies across the production lifecycle to run through due diligence. To this end, let’s take a closer look at three prospective names, from upstream, to midstream, to downstream, each of which is well-positioned to capitalize on currently fraught market conditions.
Tenaz Energy
We begin with Tenaz Energy, market cap C$1.93 billion, an emerging, growth-oriented producer that is rapidly increasing oil output from its Leduc-Woodbend asset in Alberta, anchored by its top spot as the largest natural gas producer in the Netherlands. Here’s a breakdown:
- Tenaz’s Dutch assets yield about 90 per cent of overall production, encompassing a 3,200-square-kilometre offshore land package hosting proven and probable reserves of 77.6 million barrels of oil equivalent (boe), plus more than 300 million unrisked boe up for potential upgrading.
- The Leduc-Woodbend asset, for its part, boasts a 16.8-year proven and probable reserve life and is on track to more than double production from about 1,000 boe/d in 2021 to more than 2,000 boe/d in 2026.
The company generated a consolidated 9,609 boe/d in 2025, up by 257 per cent from 2024, supported by C$315.6 million in net income, up from a C$7.7 million net loss year-over-year (YoY), lining its coffers to fund future growth, while proving to investors in no uncertain terms that it can garner market share in line with shareholder value.
Leadership estimates that operations will hit up to 22,500 boe/d in 2026 and more than 30,000 boe/d in 2027, according to the April 2026 investor deck, driven by organic growth and contributions from recent acquisitions, with production and G&A costs expected to fall and funds flow from operations expected to grow exponentially over the period.
Tenaz’s ability to self-fund growth and sell into politically stable markets, leveraging Canada’s stronghold on US energy demand, as well as the EU’s reliance on gas imports – specifically from Qatar’s currently offline Ras Laffan complex, which supplies about 20 per cent of global natural gas liquids (NGL) – highlights the company’s blue-sky potential as it harvests its considerable resource base and reinforces the Western energy supply chain.
Tenaz Energy stock (TSX:TNZ) last traded at C$59.89 and has added 379.12 per cent year-over-year.
Tidewater Midstream and Infrastructure
Shifting to the middle of the oil and gas production cycle, we have Tidewater Midstream and Infrastructure, market cap C$238.65 million, a vertically integrated North American platform for the processing of gas, NGL, petroleum and renewables.
Tidewater’s midstream assets include the Ram River gas plant, a sour natural gas processing facility employing sulfur handling solutions, and the Brazeau River complex, a full-service ~180 mmcf/d natural gas and NGL processing facility with two natural gas storage pools.
The company also owns downstream assets that support refined product revenue and renewables initiatives, include the 12 mbbl/d Prince George refinery, the only light-oil refinery within the interior of British Columbia, and the HDRD renewable diesel and hydrogen complex, operated by majority-owned Tidewater Renewables (TSX:LCFS), whose nameplate capacity stands at 3 mbbl/d and 10 mmcf/d, respectively.
Although Tidewater Midstream shouldered heavy losses and lower operating income in 2025, stemming from a series of repairs, refurbishments, divestitures and acquisitions to right-size operations, leadership expects these measures to result in a sharp reversal in 2026, as highlighted by:
- Estimated adjusted EBITDA of between C$150-C$170 million, at least five times higher YoY, reflecting optimized performance across its asset base.
- Cash flow directed towards debt reduction, with net debt falling from C$530.9 million in 2024 to C$391.7 million in 2025.
- Momentum from the Government of British Columbia increasing renewable fuel content for diesel from 4 to 8 per cent, mandating that this content be produced in Canada, paving the way for a more competitive domestic renewable fuels industry.
With the risk of Middle East processing capacity currently outweighing its reward, investors have shown strong support for what is shaping up to be a value-accretive year ahead for Tidewater Midstream (TSX:TWM), lifting the stock, last trading at C$10.94, by more than 115 per cent year to date.
Whitecap Resources
We’ll wrap up our stroll through the oil and gas production lifecycle with Whitecap Resources, market cap C$16.91 billion, a well-established producer in the Western Canadian Sedimentary Basin known for its reliable dividend and track record of profitable growth.
Whitecap’s portfolio includes 1.5 million acres in Alberta’s Montney and Duvernay, making it the largest landholder in these prolific regions, plus more than 3 million acres across prospective plays in Alberta and Saskatchewan hosting 14 billion barrels of original oil in place.
The company stands at Canada’s 5th-largest oil and natural gas producer, with output estimated between 370,000-375,000 boe/d in 2026, up by 22 per cent from a record of 307,245 boe/d YoY, supported by estimated funds flow of C$4 billion, up from a record C$2.9 billion YoY, continuing an impressing long-term track record of marrying cash flow and top-line growth. Key metrics since 2010 include:
- Production compounding at 11 per cent annually.
- Funds flow compounding at 12 per cent annually.
- Proven and probable reserves compounding at 11 per cent annually to 2.2 billion boe in 2025, equating to a 16.1-year reserve life.
These impeccable income statements have, in turn, allowed Whitecap to dish out an exponentially increasing dividend, climbing from C$0.61 per share in 2013 to C$7.73 in 2025, while fostering shareholder value through C$935 million in stock repurchases from 2017 to 2025.
According to Whitecap’s 2025 financial results, a strong balance sheet, marked by ~1x net debt/funds flow, liquidity of C$1.5 billion and stress test leverage to US$50 per barrel WTI, complemented by a development runway of more than 10,000 high-quality drilling locations, makes the company especially suited to navigate ongoing energy volatility, responding to market weakness from a position of strength at it eyes further growth.
Whitecap Resources stock (TSX:WCP) last traded at C$14.16 and has added 76.12 per cent year-over-year.
Takeaway
While market disruptions like the US/Israel-Iran war can offer undervalued entry points for new investments, trading over the short-term will only earn you, at best, a marginal return, which won’t make a lasting difference in your quality of life unless you happen to wager a large amount at the offset.
Conversely, investors who regularly buy into stocks with solid fundamentals, such as the trio we profiled today, and hold them for five years or more, stand the best chance at earning a return that meaningfully advances their financial goals, regardless of where the macroeconomic wind happens to be blowing at any given moment in time.
Join the discussion: Find out what investors are saying about these oil and gas stocks on the Tenaz Energy Corp., Tidewater Midstream and Infrastructure Ltd. and Whitecap Resources Inc. Bullboards, and make sure to explore the rest of Stockhouse’s stock forums and message boards.