After weak performance this summer as many as seven Canadian oil and gas companies could potentially be removed from the Toronto Stock Exchange index, including the S&P/TSX composite index, analysts say.

If the companies are to be removed from the index, the economic damage to the sector would be substantial.

Among those companies facing deletion from the index are: Kelt Exploration Ltd., Peyto Exploration and Development Corp., NuVista Energy Ltd., Torc Oil and Gas Ltd., Birchcliff Energy Ltd., Precision Drilling Corp., and Ensign Energy Services Inc.

The performance of these companies has fallen so low that they don’t meet requirements set by S&P Global Inc. and TMX Group Ltd. who oversee the index.

“The problem is the market has just been so beat up through the summer that there just isn’t anybody listening right now to the oil and gas story,” said President and CEO of Kelt, David Wilson.

While the index providers have yet to contact individuals about a potential removal, analysts are expecting that this is the case.

“The fact is, right now, there’s such a lack of investor interest in Canadian energy equities that the stock valuations have gone soft and we’re going to fall off the index. I mean, it’s inevitable based on the numbers,” said Kevin Neveu, President and CEO of Precision Drilling.

Observers can expect an announcement over the next few days, with the potential removals taking place on September 20.

“Here we just announced Q2 results and we’re over 10 times that size [when they were introduced to the index]. It’s a bit amazing that we’re so much bigger in terms of the size of the company’s production, cash flow, reserves, everything and having delivered incredible profitability over the last 17 years and yet we’re not big enough to be on the Composite Index anymore,” said President and Ceo of Peyto Exploration, Darren Gee.

According to S&P, those companies which are reduced to less than 0.025 percent of the index are to be removed and cannot be included back into the list for another 12 months.