The oil and gas penny stock universe is comprised of small companies involved in the exploration, extraction, refining, and transportation of oil and gas products. These stocks typically trade below $5 per share. The oil and gas industry also includes companies that provide drilling and well-maintenance services. Some examples of these penny stocks include Oasis Petroleum Inc. (OAS), Abraxas Petroleum Corp. (AXAS), and SM Energy Co. (SM). Prices for crude oil and natural gas plunged earlier this year as the impact of COVID-19 slashed demand. While prices have recovered somewhat, the collapse in demand and prices has adversely affected some companies.
Oil and gas penny stocks are generally represented by the Invesco S&P SmallCap Energy ETF (PSCE), though the fund includes many micro- and small-cap stocks that are not considered penny stocks. PSCE has dramatically underperformed the broader market with a total return of -58.0% over the past 12 months, well below the Russell 1000's total return of 15.9%, as of September 15, 2020. All statistics in the tables below are as of September 16.
Here are the top 3 oil and gas penny stocks with the best value, most growth or least profit decline, and the most momentum.
Best Value Oil and Gas Penny Stocks
These are the oil and gas penny stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Oil and Gas Penny Stocks|
|Price ($)||Market Cap ($M)||12-Month Trailing P/E Ratio|
|Transportadora de Gas del Sur SA (TGS)||4.44||675.4||3.9|
|Enable Midstream Partners LP (ENBL)||4.50||1,960||7.9|
|Helix Energy Solutions Group Inc. (HLX)||3.19||478.7||15.2|
- Transportadora de Gas del Sur SA: Transportadora de Gas del Sur is an Argentina-based natural gas producer that transports and processes natural gas. The company's system of pipelines connects major gas fields in Southern and Western Argentina with gas distributors in those areas and in the greater Buenos Aires area.
- Enable Midstream Partners LP: Enable Midstream Partners operates and develops natural gas and crude oil infrastructure assets. The company provides oil and gas services, including gathering, processing, transporting, and storing. Enable reported a 64.5% drop in net income as total revenue fell 29.9% in Q2 2020, which ended June 30, 2020. The company said that lower revenue was driven by lower average prices and lower volumes for natural gas.
- Helix Energy Solutions Group Inc.: Helix Energy Solutions is an offshore energy company focused on subsea construction, and maintenance and salvage services to the offshore natural gas and oil industry. The company also offers well intervention and robotics operations to the offshore energy industry. Helix reported a 67.7% decline in net income as revenue fell 1.3% in Q2 2020, which ended June 30, 2020. President and Chief Executive Officer (CEO) Owen Kratz said that the company will continue to face headwinds resulting from the COVID-19 pandemic.
Oil and Gas Penny Stocks Stocks With the Most Profit Growth or Least Profit Decline
These are the oil and gas penny stocks with the highest year-over-year (YOY) earnings per share (EPS) growth or lowest EPS decline for the most recent quarter. A company’s ability to maintain profitability in a difficult business environment can be a sign of good management and/or a strong business model.
|Oil and Gas Penny Stocks Stocks With the Most Profit Growth or Least Profit Decline|
|Price ($)||Market Cap ($M)||EPS Growth (%)|
|Canacol Energy Ltd. (CNE.TO)||CA$3.61||CA$653.4||935.9|
|Helix Energy Solutions Group Inc. (HLX)||3.19||478.7||-63.6|
|Enable Midstream Partners LP (ENBL)||4.50||1,960||-69.2|
- Canacol Energy Ltd.: Canacol Energy is a Canada-based oil and gas exploration and production company with operations in Colombia and Ecuador. The company reported an 843.3% rise in net income on revenue growth of 21.2% in Q2 2020, which ended June 30, 2020. Net income received a boost from a deferred income tax recovery of $11.7 million.
- Helix Energy Solutions Group Inc.: See above for company description.
- Enable Midstream Partners LP: See above for company description.
Oil and Gas Penny Stocks with the Most Momentum
These are the oil and gas penny stocks that had the highest total return over the last 12 months.
|Oil and Gas Penny Stocks with the Most Momentum|
|Price ($)||Market Cap ($M)||12-Month Trailing Total Return (%)|
|Africa Energy Corp. (AFE)||CA$0.45||CA$355.6||67.9|
|Clean Energy Fuels Corp. (CLNE)||2.63||522.6||23.5|
|Southwestern Energy Co. (SWN)||2.40||1,453||7.6|
|Invesco S&P SmallCap Energy ETF (PSCE)||N/A||N/A||-58.0|
- Africa Energy Corp.: Africa Energy is a Canada-based oil and gas company focused on the acquisition, exploration, and production of oil and gas properties in South Africa and Namibia.
- Clean Energy Fuels Corp.: Clean Energy Fuels Corp is a producer of renewable natural gas. The company creates natural gas from decomposing organic waste, rather than extracting it from underground deposits. Clean Energy Fuels posted a net loss of $7.0 million as revenue fell 17.2% in Q2 2020, which ended June 30, 2020. The company said that it experienced a 10% decrease in volumes related to the impact of the COVID-19 pandemic.
- Southwestern Energy Co.: Southwestern Energy is an energy company that engages in natural gas and oil exploration, development and production. The company announced in mid-August that it had entered into a definitive agreement to acquire Montage Resources Corp. (MR) in an all-stock transaction. Montage Resources is an exploration and production company operating in the Appalachian Basin. The transaction is expected to close sometime in Q4 2020.
YCharts. "Financial Data." Accessed Sep. 16, 2020.
Enable Midstream Partners LP. "Enable Midstream Announces Second Quarter 2020 Financial and Operating Results." Accessed Sep. 16, 2020.
Helix Energy Solutions Group Inc. "Helix Reports Second Quarter 2020 Results." Accessed Sep. 16, 2020.
Canacol Energy Ltd. "INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) THREE AND SIX MONTHS ENDED JUNE 30, 2020," Page 2. Accessed Sep. 16, 2020.
Clean Energy Fuels Corp. "Clean Energy Reports 89.5 Million Gallons Delivered and Revenue of $59.9 Million for Second Quarter of 2020." Accessed Sep. 16, 2020.
Southwestern Energy Co. "Southwestern Energy Announces Agreement to Acquire Montage Resources." Accessed Sep. 16, 2020.