As the broader TSX index nears its all-time highs, many Canadian oil and gas stocks have struggled to keep pace in the past year. This ongoing downturn presents a unique opportunity for savvy investors to acquire high-quality energy stocks at discounted prices, which may yield significant returns by 2025. In this article, we will spotlight two promising Canadian oil and gas stocks worth monitoring for their potential growth.
Tourmaline Oil: A Stock to Watch
With a market capitalization of $25 billion, Tourmaline Oil (TSX:TOU) stands as one of Canada’s largest oil and gas companies. Despite facing pressure from falling natural gas prices, Tourmaline reported impressive third-quarter (Q3) results in 2025, showcasing its resilience in a challenging market.
During Q3, the company achieved a cash flow of $742 million, translating to $2.09 per diluted share, while net earnings were reported at $355 million, equating to $1.00 per diluted share. CEO Mike Rose shared optimistic insights, highlighting a significant improvement in Deep Basin well productivity—up 20% for gas and 40% for condensate compared to the previous four-year average. This performance signals a robust operational strategy that could enhance its stock value in the long run.
Tourmaline has also declared a special dividend of $0.50 per share, pushing total dividends distributed over the past year to $3.25 per share, which reflects an attractive trailing yield of 5%. Average production in Q3 reached 557,000 barrels of oil equivalent (BOE) per day, an 11% year-over-year increase, despite some challenges from unplanned outages. Looking ahead to Q4, the company expects production levels to range from 600,000 to 620,000 BOE per day, with an optimistic exit rate forecasted to reach 630,000 to 640,000 BOE.
For 2025, Tourmaline anticipates production between 635,000 and 665,000 BOE, coupled with a capital expenditure budget of $2.6 to $2.85 billion. The organization aims to retain flexibility in its spending structure in response to market fluctuations in natural gas prices, which are projected to experience an upward trend over the next year. “We anticipate steadily improving natural gas prices in 2025, with a potential recovery materializing in the latter half of the year,” Rose elaborated.
Enerflex: Boasting Strong Fundamentals
On the other hand, Enerflex (TSX:EFX) is an energy infrastructure company that has impressively risen over 85% in the past year. Nevertheless, the stock is currently down 13% from its 52-week peak. Enerflex recently reported strong Q3 results that showcased a 50% increase in its dividend, attributed to stable recurring revenue streams and successful efforts to reduce debt.
In Q3, Enerflex posted revenues of $601 million, a rise from $580 million year-over-year, alongside adjusted EBITDA soaring to $120 million from $90 million. The company also highlighted cash flow from operations of $98 million, aided by a $35 million recovery in working capital. CEO Marc Rossiter emphasized the company’s improved financial health, revealing it has managed to reduce leverage within its target range, enhancing its position to capitalize on future opportunities.
Despite the positive performance indicators, the company noted challenges stemming from prolonged weakness in domestic natural gas prices, which have affected North American demand. However, the company continues to hold a robust backlog of engineered systems worth $1.3 billion and secured new bookings of $349 million. Given these factors, Enerflex revised its 2024 capital spending guidance down to $80-90 million, reflecting a judicious approach amid market fluctuations.
Conclusion
In summary, both Tourmaline Oil and Enerflex exemplify potential opportunities for investors interested in the Canadian oil and gas stocks market. With encouraging financial results and strategic adaptations to market conditions, these companies demonstrate resilience and growth potential. As the sector navigates the current challenges, the discounted pricing of these stocks could provide a compelling investment avenue for those looking to capitalize on future recovery trends. Investing in these stocks may be a sound decision as the energy market is poised for growth in the coming years.