Such pessimism looks unwarranted. The country hosts some of the most efficient operators in the world, many of which sporting best-in-class capital efficiency and extraction costs. On top of these economics come talented, shareholder-friendly managements, an orderly regulatory framework as well as a non-optional adherence to stringent ESG standards.

Elsewhere in the world, supply chains from the Middle East remain at permanent risk of disruption. Venezuela and large African producers such as Libya, Angola or Nigeria are structurally failed states. Russia, for its part, has been accurately portrayed by a famous U.S. senator as a gas station run by the mob. That leaves Canada with a privileged position on the global energy chessboard.

Albeit unpredictable, oil price has held out above an average of $60 per barrel, an endless pandemic and OPEC+ easing production curtailments notwithstanding. Gloomy headlines have had little impact on consumption so far, with demand near all-time highs and storage reaching ten-years lows. 

In fact, the peak oil narrative has been going on for decades — either on the supply or demand side — but it seems to have nothing to envy to the peak coal narrative, which usage is itself at all time-highs despite all the bad press it rightfully deserves.

For those who hold the view that oil will last as a staple of modern civilization and a major source of energy in the future, yet do not want to bet on junior producers with higher torque but stretched balance sheets, Suncor is offering a compelling alternative. The Canadian major may not have as much upside as other leveraged names in the sector, but it sports a highly resilient business, while its valuation carries an astounding margin of safety.

With its fortress balance sheet and integrated model — from production to refining, transport, storage and distribution — the company owns a unique, non-replicable infrastructure across Canada and North America. Among its prize assets are the Syncrude and Fort Hill production sites, the 380,000 barrels-per-day refining capacity, the giant Western Canada storage facilities and the Petro-Canada gas stations network.

Upstream, the company is milking its long-life oil sands assets with over 30 years of reserves and an annual production of about 750,000 barrels per day. Oil sands have the advantage of low decline rates, low production costs and close to zero geologic risk. The cons are very high upfront investments, but at Suncor those have been amortized years ago.

With its huge feedstock access, refineries geared for heavy crude processing and dedicated, fully-owned midstream and sales channels, Suncor achieves synergies along the whole value chain, with industry-leading utilization rates and high margins. In this regard, with its assets concentrated in the world's safest jurisdiction and limited exploration investments going forward, the company is capable of keeping its average production cash cost under $30 per barrel, and can technically break even at $35 per barrel.

Under Steve Williams' leadership, previous management executed the highly opportunistic takeover of Canadian Oil Sands during the downturn — in fact, right at the bottom. Combined with capex roll-offs at their other sites, this well-timed acquisition should prove highly accretive over the next decades.

Now that its oil sands assets are fully developed, and that the company has acquired operatorship of Syncrude, additional synergies are expected ahead. This is leading management to forecast $53bn in funds from operations over the 2021-2015 period. 

Meanwhile, their focus has shifted on returns of capital to shareholders. Under a $55 per barrel base scenario, Suncor intends to return $21 per share — $8 in dividends, $7 in share buybacks and $6 in debt reduction — to its owners over the next five years. That comes against a current share price of just $22. The opportunity did not escape insiders, who themselves have been avid acquirers on the open market.

So what could go wrong? Suncor has had chronic operational issues in the past, including fires at its Fort Hill facility; a new drop of oil price cannot be ruled out; and financial institutions, spooked by the rampant ESG mania and anti-oil narrative, may keep shunning the industry for a while.

We frame things differently, and believe that among large capitalizations Suncor stands out as one of the finest and safest contrarian investments in equity markets today. As a result, via Standard and other family-controlled investment vehicles, we have accumulated a sizeable amount of shares between $15 and $19.