BMO 2022 Energy Picks BMO energy analyst Randy Ollenberger’s year ahead report is entitled The Best is Yet to Come,
“2021 turned out to be a great year for energy investors; we think 2022 could be equally good as a multi-year bull market for energy takes hold. In our opinion, the recent European energy crisis may provide a glimpse of things to come following years of underinvestment, tightening environmental expectations and shifting shareholder demands. The North American oil and gas group is in its strongest financial position in the last 15-years and poised to generate record levels of free cash flow that we believe will be largely distributed to shareholders… The oil and gas industry is facing an unprecedented challenge: what to do with all the cash? Free cash flow for our North American coverage group soared from $9.6 billion in 2020 to $140 billion in 2021, allowing the group to reduce debt as well as boost dividends and share buybacks. We expect free cash flow to increase to more than $160 billion in 2022 and $170 billion in 2023 and believe that paying down debt will be a lower priority in 2022. We anticipate this will result in accelerating cash returns to investors. Our top recommendations are Antero, ARC Resources, Canadian Natural, Cenovus, Crescent Point, Devon, Enerplus, Headwater, Ovintiv, Parex, Pioneer, Suncor, Topaz, and Tourmaline.”