According to the Bank of Canada, crude’s recent decline could shave a quarter of a percentage point off Canadian gross domestic product (GDP) in 2015, a big deal with growth at just 2%.

Share prices for Canada-based oil and gas exploration and production (E&P) companies are suffering, with the specter of further losses spooking already nervous investors. The situation is impossible to ignore, particularly because the CE Portfolio Aggressive Holdings include six E&Ps. The S&P/TSX Oil & Gas Exploration & Production Index lost 34.5% from June 20, 2014, through November 4, 2014, more than a mere correction.

We’ve seen moves like this before, most dramatically during the global financial crisis of 2008–09 but also in 2011 and 2012. The E&P index is now back to levels seen in 2005, amid the China-driven resource boom that characterized the first decade of the 21st century.

For an investor with a long-term perspective, this situation presents a compelling opportunity.

The Upside to the Downside

The slide has certainly been steep. But from here the most important issue is how long it lasts. Only an extended period—12 months or more—with prices at or below $80 per barrel would cause E&Ps to cut capital-spending programs.

In recent years the price of oil hasn’t settled below $80 a barrel for long. In 2012, crude was below $80 for four consecutive days, at a time when it looked as if the euro zone monetary union was about to crumble. In 2011, amid the initial stages of the European sovereign debt crisis, it spent six days below $80. During the global financial crisis—with concerns about another worldwide depression and a deflationary spiral—oil traded below $80 a barrel for no longer than one consecutive year before recovering.

And we’re much better off than we were during the crisis of six years ago. Europe, Asia and Latin America are struggling, certainly, but U.S. economic growth has been solid, if unspectacular, in 2014.

As David Rosenberg noted in his “Breakfast with Dave” daily note for Gluskin Sheff + Associates, “The good news is that the slide is likely over because south of $75 per barrel, Saudi Arabia slips into fiscal deficit, and that is not a social-stability line the royal family will likely want to cross.”

Logic suggests that at its November 27 meeting, OPEC will take steps to stabilize the oil price rather than ramp up production in an effort to lower it even further. That would be good news for Canadian E&P stocks, which according to Rosenberg are priced for crude in the low $70s.

Capital spending and production by Canadian E&Ps are likely to remain stable well into 2015. And companies can afford current dividend rates, with our favorite holdings posting relatively low production costs per barrel of oil produced.

CE’s Six E&Ps

The six Canada-based oil and gas exploration and production (E&P) companies we hold in the CE Portfolio all hit 52-week highs between June 13 and July 2. And all six established 2014 lows on November 4. The average top-to-bottom loss was 32.8%. The biggest losers were Enerplus Corp., at 48.7%, and Baytex Energy Corp., at 39.2%.

The carnage corresponds with a 28% decline in the per-barrel price of crude oil from June 20 through November 4 and a 26% slide for natural gas from April 29 through October 27.

Output from Enerplus (TSX: ERF, NYSE: ERF) for the second quarter was weighted 58% to natural gas. Management cut the dividend in half in mid 2012, and the stock bottomed amid a previous energy-commodity selloff on November 16 of that year. From then until early July 2014, Enerplus posted a total return of 136.5%.

I expect the factors that drove the latter run—a healthy production profile and effective cost management—to be the foundation of Enerplus’s recovery from this bearish turn. Enerplus is a buy under $20.

Baytex’s (TSX: BTE, NYSE: BTE) decline is easily understood: 85% of the company’s third-quarter production was crude oil, and the stock had also enjoyed a robust rally into mid 2014.

Output was up 56.3%, driven by the company’s recent Eagle Ford acquisition, and production costs were down 17.1%. Funds from operations (FFO) per share, the best measure of dividend support, were up 11.2%.

As is the case with Enerplus, the market is overshooting to the downside here. Baytex, which is now yielding more than 9%, is a buy under $46.

Peyto Exploration & Development Corp.’s production for the second quarter of 2014 was 90% natural gas and 10% oil and natural gas liquids (NGL).

Peyto (TSX: PEY, OTC: PEYUF) is probably the lowest-cost natural gas producer in North America, with a significant cushion against further price drops based on its ownership of land, production and processing assets. Peyto remains a buy under $38.

ARC Resources Ltd. grew third-quarter production by 22.2%, with output weighted 61% gas and 39% oil and NGLs. FFO per share grew by 25.3%, while costs per barrel of oil produced were down 14.8%.

 Like Peyto, ARC’s (TSX: ARX, OTC: AETUF) share price bounced late last week, along with natural gas prices, as forecasts for frigid late-autumn weather signaled a surge in demand for heating fuel.

ARC, poised to benefit from expectations-beating early results at its Tower and Sunrise projects, is a buy under $28.

Crescent Point Energy Corp. is the most oil-heavy of our E&P holdings, with crude representing 91% of its third-quarter production. It’s also one of the most innovative drillers in the industry. Crescent Point (TSX: CPG, NYSE: CPG) reported FFO growth of 11.6%, though per-share growth was just 2.1% due to new equity issuance during the past 12 months. Production was up 19.7%.

Crescent Point, yielding 7.7%, is a buy under $48.

Vermilion Energy Inc., like Enerplus, is relatively balanced at 64% oil and liquids, 36% gas. Management will report third-quarter results on November 10. Its key advantage is a global-production footprint that insulates it against a widening price differential between Western Canada Select crude and West Texas Intermediate crude.

Vermilion (TSX: VET, NYSE: VET) has also shown consistent production growth for the long term, the most critical factor when it comes to evaluating the ability of an E&P to support and grow its dividend.

Vermilion Energy, which is yielding 4.2% at these levels, is a buy under $64.

Energy-services companies have had a rough go of it due to their sensitivity to E&P spending plans and the perception that lower energy prices will lead to budget cuts. Share prices have been whacked, but third-quarter financial and operating results were solid.

Newalta Corp. (TSX: NAL, OTC: NWLTF) reported 7.7% growth in revenue for the three months ended September 30, while net earnings grew by 25.9% and FFO per share was up 10%.

And management reiterated its full-year forecast for 20% growth in adjusted earnings before interest, taxation, depreciation and amortization (EBITDA). Newalta may see a slight impact from declining oil sands spending, as producers in that space are much more sensitive than conventional producers to commodity prices.

But its Heavy Oil unit focuses on maintenance as opposed to exploration services, and it remains well positioned for new contracts from bigger, financially solid oil sands players such as Suncor Energy Inc. (TSX: SU, NYSE: SU).

Newalta is a buy under $20.

PHX Energy Services Corp.’s (TSX: PHX, OTC: PHXHF) directional drilling operations in the U.S. drove a 29.9% increase in third-quarter revenue, supporting 24.3% year-over-year growth in adjusted EBITDA.

PHX Energy Services, which has put together five consecutive quarters of stronger-than-forecast results, is a buy under $16.

Acadian Timber Corp. (TSX: ADN, OTC: ACAZF), benefiting from solid demand that supported improved pricing for most of its products and flat per-unit costs, reported a 15.1% increase in third-quarter sales. Favorable summer operating conditions helped push volume growth and a 50% increase in adjusted EBITDA. The EBITDA margin was 29%, a 6% improvement over the prior corresponding period. Free cash flow grew by 67.8%, a positive sign that Acadian Timber can sustain its dividend.

Acadian Timber, which has posted a double-digit gain on the TSX since October 24, remains a buy under $13.

Northern Property REIT (TSX: NPR-U, OTC: NPRUF) reported a 6.3% increase in third-quarter FFO per share, boosted by improvements in many markets and strong contributions from recent developments and acquisitions. Northern Property also raised its distribution by 3.1%, supported by solid financial results, a healthy balance sheet and a conservative payout ratio.

The foundation for future distribution growth is being laid, as the REIT began construction on 110 apartment units in the oil-focused town of Bonnyville, Alberta.

Northern Property is a buy under $30.

RioCan REIT (TSX: REI-U, OTC: RIOCF) posted solid financial and operating results as well, with third-quarter operating FFO per unit up 4.9% on double-digit rental-renewal increases.

RioCan REIT is a buy for consistent, monthly income under $27.

DH Corp. (TSX: DH, OTC: DHIFF), following through on management’s promise regarding the Harland Financial Solutions acquisition in mid 2013, reported that revenue from continuing operations grew by 38.2% in the third quarter.

Earnings per share, helped also by organic growth, were up 21.1%. Based on recent financial and operating performance as well as the increased scale provided by the Harland deal, we’re boosting our buy-under target for the stock.

DH Corp. is now a buy under $32.