Canada is known for its oil sands reserves and mining. However, the shift towards green energy is resulting in a reduction in the use of oil and shift towards greener alternatives. This shift from fossil fuel to green energy has a middle ground called natural gas. Natural gas powers cars, heats homes, is used in cooking, and is also used in electricity generation.
Canadian energy landscape
After the 2022 Russia-Ukraine war led to Europe putting sanctions on Russian energy, Canada gained a new customer. Hundreds of ships carrying liquified natural gas (LNG) transport it from North America to Europe. The increasing demand for natural gas also increased its prices. Big energy pipeline companies like Enbridge and TC Pipelines accelerated capital expenditure in gas pipeline infrastructure.
And now, Canadian Prime Minister Mark Carney will fast track approval of an LNG plant in British Columbia and upgrade of the Port of Montreal. These projects will help Canada diversify the energy trade partners with whom it can sell LNG. The government support will give the much-needed push to drive demand for Canadian energy.
This Canadian energy stock is a steal
One of the key beneficiaries of this shift will be Tourmaline Oil (TSX: TOU), Canada’s largest natural gas producer by volume, even bigger than Canadian Natural Resources. You might not have heard of Tourmaline Oil, as oil companies stole the limelight from LNG. But the coming five years will be ruled by LNG, and Tourmaline Oil is ready to meet the demand. The oil producer has been growing its capacity by acquiring natural gas assets. Its biggest advantage is low development costs.
Although Tourmaline Oil started natural gas operations in 2008, it was only in 2018 that it started paying dividends. The last three years have been bullish for Tourmaline Oil as it realized higher prices for its natural gas output. The company has frequently shared the surplus income from high energy prices with shareholders through special dividends and growing base dividends.
Tourmaline Oil has paid special dividends alongside regular quarterly dividends since 2022 while continuing to grow the latter.
| Year | Regular Dividend | Special Dividend | Total Dividend | Dividends from 242 shares of Tourmaline Oil |
| 2025 | $2.00 | $1.05 | $3.05 | $738.10 |
| 2024 | $1.32 | $2.00 | $3.32 | $803.44 |
| 2023 | $1.05 | $5.50 | $6.55 | $1,585.10 |
| 2022 | $0.90 | $7.00 | $7.90 | $1,911.80 |
| 2021 | $0.67 | $0.75 | $1.42 | $343.64 |
| 2020 | $0.50 | $0.50 | $121.00 | |
| 2019 | $0.46 | $0.46 | $111.32 | |
| 2018 | $0.37 | $0.37 | $89.54 |
A $5,000 investment in Tourmaline Oil in December 2017 could have bought you 242 shares. The annual dividend from these shares grew from $89.54 in 2018 to $738 in 2025.
Is there more upside for Tourmaline Oil?
From the above table, you can see that dividend amounts are slowing as natural gas demand normalizes. However, a new growth cycle is emerging as the government is fast-tracking projects to export LNG to other nations. The opening of new export markets could significantly boost demand and drive revenues.
There is more upside for Tourmaline Oil over the next five years as the nation develops and operationalizes LNG export infrastructure.
