Canadian Energy Stocks That Could Benefit From Higher Oil Prices

Surging gasoline prices, stubborn inflation at 3.0% and shipping disruptions in the Strait of Hormuz and Red Sea have pushed Canadian energy back into the spotlight. These pressures can squeeze some sectors while creating fresh pricing power or cash flow resilience for others. This article walks through how those forces link to Canadian oil and gas producers and infrastructure stocks, and highlights three companies that appear positively exposed to the current backdrop.

The stocks covered below are just a starting sample. The full screen surfaced 18 more Canadian energy producers and oil and gas infrastructure companies with equally compelling narratives that are not included in this article.

To go deeper into this idea, identify patterns across the sector, and analyze which stocks best fit your own risk and income profile, head straight to the Canadian Energy Producers and Oil & Gas Infrastructure screener.

Lycos Energy (TSXV:LCX)

Overview: Lycos Energy is a Calgary based producer that explores, develops and produces heavy oil and natural gas in Western Canada, giving investors direct, plain vanilla exposure to Canadian crude price moves. Its focus on the Mannville heavy oil fairway in Central Alberta closely ties Lycos Energy to the Canadian Energy Producers and Oil & Gas Infrastructure screener theme of upstream producers whose revenues respond directly to shifts in commodity prices.

Operations: Lycos Energy generates all of its CA$48 million in revenue from Canadian oil and gas exploration and production activities.

Market Cap: CA$229 million

For investors looking to lean into higher gasoline and crude prices, Lycos Energy offers concentrated Western Canadian heavy oil exposure at a time when inflation pressure is closely linked to fuel costs. The company has recently turned profitable, with 2026 net income in both the second quarter and first half contrasting with prior losses, and is ramping its Mannville drilling program with updated 2026 exit production guidance of 4,000 to 4,500 boe/d. At the same time, a high P/E, recent equity dilution and reliance on external funding mean the stock carries execution and valuation risk. If Lycos Energy hits its production targets and manages capital carefully, the combination of direct price leverage and improving earnings could be powerful.

Lycos Energy’s recent profitability and concentrated heavy oil exposure could be masking a far bigger story around earnings leverage and funding risk. Get the full picture with the 3 key rewards and 2 important warning signs (1 is major!)

Build your own heavy oil and cash flow shortlist

Lycos Energy and the two other stocks in this article all came from a single screener, but your real edge comes from shaping your own filters. Use our flexible Screener to combine valuation, growth, quality, risk and income metrics into a shortlist that fits you, or tap into our curated Investing Ideas for ready made starting points.

Alvopetro Energy (TSXV:ALV)

Overview: Alvopetro Energy is a Calgary based oil and gas producer focused on onshore natural gas and oil fields in Brazil, with a smaller but growing production foothold in Canada. This ties it directly to the Canadian Energy Producers and Oil & Gas Infrastructure screener’s emphasis on companies whose cash flows move with global crude and gas prices.

Operations: Alvopetro Energy generates about $62 million in revenue from oil and gas exploration and production, with roughly $59 million coming from Brazil and about $3 million from Canada.

Market Cap: CA$379 million

Alvopetro Energy gives you a combination of Brazilian gas pricing linked to U.S. inflation and Canadian oil exposure at a time when fuel driven inflation is back in focus and higher crude and gas prices are a key macro story. Recent Q2 2026 results show solid profitability on both revenue and net income, underpinned by long term gas sales contracts in Brazil that use price floors, ceilings and inflation indexation. These contract features can temper short term volatility while still tying the business to global energy benchmarks. On the other hand, a high dividend yield with weaker free cash flow coverage, concentration in Brazilian assets and reliance on higher risk funding sources mean you need to weigh income and valuation appeal against country, contract and financing risks that could matter if conditions change.

Alvopetro Energy’s mix of Brazilian gas contracts and Canadian barrels can look simple on the surface. The real story sits in the fine print of pricing floors, inflation links and renewal terms inside the analysis report for Alvopetro Energy

PHX Energy Services (TSX:PHX)

Overview: PHX Energy Services provides horizontal and directional drilling services and rents high spec drilling motors and measurement while drilling tools to oil and gas producers, giving investors indirect exposure to drilling activity as companies respond to commodity price and inflation driven cost signals. By supplying this technical infrastructure in Canada, the United States and internationally, PHX Energy Services is tightly linked to the Canadian Energy Producers and Oil & Gas Infrastructure screener theme of service providers whose fortunes move with upstream spending.

Operations: PHX Energy Services generates about CA$711 million in revenue from horizontal oil and natural gas well drilling services, with roughly CA$205 million from Canada and CA$506 million from the United States.

Market Cap: CA$567 million

PHX Energy Services is worth a close look if you want indirect leverage to stronger energy markets without owning a producer outright. The company’s drilling and motor rental business ties activity levels to higher commodity prices and a 3.0% inflation backdrop, where fuel costs are in focus. Recent results show ongoing profitability, a dividend yield above 6% and a board backed buyback program that runs to August 2027. Together, these indicate an emphasis on shareholder returns. The trade off is that free cash flow has not fully covered those dividends and the balance sheet leans on external borrowing, so investors need to judge how sustainable that payout looks if drilling slows or day rates soften.

PHX Energy Services is leaning into higher activity with a dividend above 6% and a buyback program that runs to August 2027. Yet the real story sits inside the 2 key rewards and 2 important warning signs

Seeking Alternatives Before The Crowd Moves

Fresh ideas do not stay quiet for long. Stocks with real momentum often move from under the radar to flying quickly. Before the best entry points are gone, get in early.

• Spot cash rich businesses before momentum headlines hit by scanning our hand picked list of solid balance sheet and fundamentals (12 results), which keeps financial strength at the center of the story.
• Chase early breakout potential in overlooked fast growers by filtering through a curated 8 high quality undiscovered gems list, which focuses on quality first and hype second.
• Position ahead of power hungry trends by reviewing carefully selected 39 power grid technology and infrastructure stocks, which could benefit as electricity demand and grid reliability stay in focus.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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