This article originally appeared on RealMoney.com. To read more content like this AND see inside Jim Cramer's multi-million-dollar portfolio for FREE, Click Here NOW.
It has been tough to find value in energy this year. Oil shale still represents the best investment opportunity in the U.S., but most U.S. exploration-and-production (E&P) companies have already had a massive run, so it's been tough to find value in the space. That's why I'm starting to think that the remaining value in E&P might lie north of the border, in Canadian oil companies.
The model for production and the risks between the U.S. and Canadian companies I follow couldn't be more different. U.S. firms pursue unconventional oil from horizontal hydraulic fracturing, and Canadian firms generate growth from oil-sands development, mostly in the Athabasca. But, in the end, value in the E&P space is related to price -- and Canadian share prices have remained steady as U.S. companies have soared. So the oil sands space, as burdened as it is, is looking better all the time.
Of course, it is the Keystone pipeline controversy that has helped keep down the share prices of Suncor (SU), Canadian Natural Resources (CNQ) and Cenovus (CVE). Even if the further development of oil shale isn't much dependent upon Keystone, and even though other pipelines for transport are available, the overhang of Keystone as the symbol of oil sands remains. A Keystone approval would be the ultimate signal for getting into these names.