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Flipping the script, we expect more downside in the large caps if WTI crude persists in the US$50/Bbl range

In the US, the overwhelmingly obvious "second order" theme; is that a decline in crude-directed drilling will cause a strengthening of natural gas prices; as associated gas growth from the Permian tightens balances. While we don't necessarily have an issue with that thesis, we don't believe the same principles are applicable to Canada. Every single public operator in the Montney and Duvernay have the option to direct their capital towards liquids-rich gas projects, even those in the updip volatile oil window have areas within their asset where >8Bcf recoveries are largely derisked. For this reason, we remain neutral towards natural gas prices. While we'd expect US operators to cut capital spending; we'd expect more of a shift from Canadian operators given asset flexibility, lower break-evens, and a more favourable.