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For producers, there has been a change in investor sentiment.

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Brian Schmidt, CEO of Calgary-based Tamarack Valley Energy — its share price has climbed 56 per cent this year and market capitalization is nearing $6 billion — said he’s seeing more interest from investors in the United States.

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He estimates 75 to 80 per cent of the company’s shareholder base is from south of the border, much higher than levels seen shortly after the pandemic.

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“Compared to the way the (Western Canadian Sedimentary) basin looked 10 years ago, these are great companies,” he said, noting producers have reduced their debt levels, and most are buying back shares and growing output.

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“The interest in Canada has picked up a lot. It’s quite astounding, actually.”

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File photo: Brian Schmidt, president and CEO of Tamarack Valley Energy, is pictured along with his bronze sculpture Portrait of a Roughneck by Don Toney on Friday, Jan. 2, 2015. Photo by Ted Rhodes /Calgary Herald

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Meanwhile, larger companies with a bigger market capitalization can attract more institutional investors, noted Kelt Exploration CEO David Wilson.

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“Liquidity is . . . important to an investor, so the bigger your market cap, the broader your investment base can be,” he said.

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“You have had a bump up in commodity prices, and investors are starting to get more and more aligned with the idea that we do need oil and gas, and it’s going to be a big part of the world to go forward.”

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More companies are becoming large enough to meet the investment thresholds for some institutional funds.

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Laura Lau, chief investment officer with Brompton Group, said oil and gas producers need to have a market cap above $2 billion, and pay dividends, for her funds to consider buying a position.

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“The problem with Canadian energy before this is that there are only so many investable companies,” Lau said.

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“I think the breadth of the market is finally expanding, that Canada is back.”

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Eric Nuttall, a senior portfolio manager with Ninepoint Partners, said he typically looks for public companies that have a stock market value that exceeds $3 billion or $4 billion, to meet his investment threshold.

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And while it’s good to see more companies with a market cap above $1 billion, the overall industry has watched a number of firms disappear through M&A deals in recent years.

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“I think everyone is desperate for new names to invest in, because we’ve lost some of our favourite companies,” he said.

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“Consolidation leads clearly to fewer names, and if this trend continues, then we’re going to be left with nothing but a handful of companies to invest in.”

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Chris Varcoe is a Calgary Herald columnist.

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