Canadian oil and gas producers are preparing to ramp up production in 2027, with a new survey showing growing optimism across the energy sector despite expectations of lower oil prices and continued concerns about federal energy policies.A survey released Wednesday by ATB Cormark Capital Markets found 96% of exploration and production companies expect to increase output over the next year, while 90% of energy services companies anticipate higher customer activity in 2027.The findings suggest a major turnaround from a year ago, when uncertainty surrounding commodity prices and government policies contributed to a more cautious outlook.“A year ago, the industry was much more cautious. Today, we’re seeing producers plan for higher output, service companies anticipate more activity, and investors put growth back at the top of their priorities,” said Darren Eurich, CEO of ATB Cormark Capital Markets.“The outlook for major infrastructure projects is also improving, which matters for an industry that needs access to more markets.”The survey forecasts Canadian oilfield activity and exploration and production capital spending will increase by approximately 5% to 10% in 2027.Among producers surveyed, 96% expect production increases over the next year, compared with 88% in fall 2025.Oil-focused producers anticipate production growth of approximately 10%, while natural gas producers expect increases of about 5%.More than half of producers, 56%, expect higher exploration and development spending next year.Energy services companies are also reporting improving business conditions, with 71% saying their outlook has strengthened over the past three months. None reported a deterioration..Another 57% expect profit margins to improve over the next six months as demand for services increases.For the first time since fall 2022, more energy services companies reported excess demand than excess capacity, suggesting the industry could face tighter equipment and labour availability as activity increases.Institutional investors are also becoming increasingly optimistic about Canadian energy companies.The survey found 76% of institutional investors have become more bullish on energy over the past six months, while 61% have increased their exposure to the sector.Nearly four out of five institutional investors believe Canadian energy stocks are undervalued, while 63% expect energy equities to outperform the broader S&P/TSX Composite Index over the next year.However, that figure is down from 76% in the spring survey.In a significant change, institutional investors now favour spending on growth projects over share buybacks and debt repayment.The survey found 41% ranked growth spending as their top priority, compared with just 18% in spring 2026.It marks the first time since ATB Cormark began conducting the survey in 2021 that growth spending has topped the list of investor preferences.“What’s notable is that companies are planning to grow even with an expectation that oil prices will normalize into a lower range over the next year,” said Tim Monachello, managing director of institutional research at ATB Cormark Capital Markets.“Institutional investors are also becoming less defensive, preferring growth spending over buybacks and debt repayment for the first time in the Survey’s history.”.Monachello said the shift reflects growing confidence in the industry's outlook and stronger investor support for expansion.Despite the optimism, most respondents expect crude oil prices to decline over the coming year.The survey found 61% anticipate lower oil prices compared with the approximately US$98 per barrel average recorded during the September survey period.However, longer-term expectations have improved.Among producers and institutional investors, 53% expect West Texas Intermediate crude to average more than US$75 per barrel over the next three to five years.That compares with 43% in spring 2026 and 38% in fall 2025.Natural gas producers are facing a somewhat different outlook, with 42% of respondents expecting higher gas prices over the next year and only 6% anticipating declines.Respondents were also increasingly optimistic about the prospects for major Canadian energy infrastructure projects, including additional oil pipeline capacity and liquefied natural gas export facilities.The survey found 89% viewed the federal government's approach to expanding Canada's energy industry positively.Strong majorities also expect positive decisions on major projects, including Pacific Link/Pathways, Prairie Connector and Ksi Lisims.Expansion of West Coast LNG export capacity remains the industry's leading opportunity, reflecting the importance of securing greater access to international markets.However, federal energy and environmental policies continue to rank as the industry's biggest risk, despite concerns easing compared with previous surveys.The findings come as Canadian energy producers seek to expand exports and take advantage of growing demand for oil and natural gas in overseas markets.ATB Cormark conducted the survey between September 14 and September 28, collecting 91 responses from 27 exploration and production companies, 22 energy services companies and 42 institutional investors.The survey is conducted twice annually to assess industry expectations surrounding production, commodity prices, capital spending and government policy.
