Canadian oil and natural gas companies benefited from robust oil and gas prices and continued growth through production in the second quarter, according to a report released Aug. 26 by Standard & Poor's Ratings Services.
Canada's exploration and production companies also have started to realize production growth from recently completed projects, international operations, and increased drilling activity, S&P reported.
"As conventional domestic reserves continue to decline, we expect Canadian oil and gas companies will increasingly look to international regions for future reserve replacements," said S&P's credit analyst Michelle Dathorne.
"Although international areas will generally provide large-scale reserve additions with competitive production economics, these assets introduce greater political risks to the companies' credit profiles and are generally subject to fairly onerous fiscal terms," said S&P.
"Still, overall credit quality continued to benefit from strong hydrocarbon prices and increasing production," S&P reported, adding that it expects these positive fundamentals to continue to bolster Canadian oil and gas companies' credit profiles in the second half.
