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 $5 per share. The oil and gas industry also includes companies that provide drilling and well-maintenance services. Some examples of these penny stocks include ProPetro Holding Corp. (PUMP), Range Resources Corp. (RRC), and SM Energy Co. (SM).
Currently, a price war between Saudi Arabia and Russia has caused the price of oil to plummet, a move exacerbated by the COVID-19 crisis. Because of this, the entire sector is severely depressed, so be careful when investing in this volatile market. Oil and gas penny stocks, as represented by the Invesco S&P SmallCap Energy ETF (PSCE), have dramatically underperformed the broader market, posting a negative total return of 77.6% compared to the S&P 500's negative return of of 6.2% over the past 12 months. These market performance numbers and the statistics in the tables below are as of March 13.
Here are the top 3 oil and gas penny stocks with the best value, the fastest earnings growth, and the most momentum.
Best Value Oil and Gas Penny Stocks
These are the oil and gas penny stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Oil and Gas Penny Stocks|
|Price ($)||Market Cap ($M)||12-Month Trailing P/E Ratio|
Ovintiv Inc. (OVV.TO)
|Southwestern Energy Co. (SWN)||1.48||800.8||0.9|
|Frontera Energy Corp. (FEC.TO)||CA$3.90||CA$376.1||1.0|
- Ovintiv Inc.: Ovintiv, formerly known as Encana, is an energy company previously headquartered in Canada but now based in the U.S. The company has a portfolio of oil, natural-gas, and natural-gas-liquids properties, and has operations in both the U.S. and Canada. Ovintiv announced last week that it plans to immediately reduce Q2 2020 capital investments by $300 million and full-year cash costs by $100 million due to the plunge in oil prices.
- Southwestern Energy Co.: Southwestern Energy engages in natural gas and oil exploration, development and production. The company reported annual net income growth of 65.9% for FY 2019. However, that growth was largely aided by a significant deferred tax benefit as operating revenue fell 21.3% for the year.
- Frontera Energy Corp.: Frontera Energy is a Canada-based oil company engaged in the exploration, development, and production of crude oil and natural gas. It has operations throughout the world but are primarily located in South America.
Fastest Growing Oil and Gas Penny Stocks
These are the oil and gas penny stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Oil and Gas Penny Stocks|
|Price ($)||Market Cap ($M)||EPS Growth (%)|
|Northern Oil & Gas Inc. (NOG)||0.94||382.9||300.0|
|Archrock Inc. (AROC)||3.70||565.7||200.0|
|Ovintiv Inc. (OVV.TO)||CA$3.55||CA$922.4||177.8|
- Northern Oil & Gas Inc.: Northern Oil & Gas is engaged in the acquisition, exploration, development, and production of crude oil and natural gas properties. On January 1, Brandon Elliot stepped down as Chief Executive Officer (CEO) and was succeeded by President and Chief Financial Officer (CFO) Nicholas O'Grady. Chief Accounting Officer Chad Allen assumed the role of CFO.
- Archrock Inc.: Archrock is a contract operations services company that provides maintenance, service, and equipment for oil and natural gas production, processing, and transportation applications.
- Ovintiv Inc.: See above for company description.
Oil and Gas Penny Stocks with the Most Momentum
These are the oil and gas penny stocks that had the highest total return over the last 12 months. While these 3 stocks posted negative total returns during this period, their prices have fallen the least in sector that has been hammered by falling oil prices.
|Oil and Gas Penny Stocks with the Most Momentum|
|Market Cap ($M)||12-Month Trailing Total Return (%)|
|Jadestone Energy Inc. (JSE.V)||CA$0.66||CA$304.3||-15.4|
Africa Oil Corp. (AOI.TO)
|Canacol Energy Ltd. (CNE.TO)||CA$3.15||CA$570.1||-30.1|
|S&P 500 (SPY)||N/A||N/A||-6.2%|
|Invesco S&P SmallCap Energy ETF (PSCE)||N/A||N/A||-77.6%|
- Jadestone Energy Inc.: Jadestone Energy, formerly Mitra Energy Inc., is a Singapore-based oil and gas company that engages in the exploration, appraisal, and development of oil and gas properties.
- Africa Oil Corp.: Africa Oil is a Canada-based oil and gas exploration and production company with operations in Kenya and Ethiopia.
- Canacol Energy Ltd.: Canacol Energy is a Canada-based oil and gas exploration and production company with operations in Colombia and Ecuador. The company announced in November that it had begun producing and selling liquified natural gas (LNG) in Colombia, the first operation of its kind in the Latin American nation.
Wall Street Journal. "Inside Saudi Arabia’s Decision to Launch an Oil-Price War," Accessed March 20, 2020.
YCharts. "Financial Data," Accessed Mar. 13, 2020.
Ovintiv Inc. "Ovintiv Takes Immediate and Significant Action; Reduces Second Quarter 2020 Capital Investments by $300 Million; Full-Year Cash Costs to Drop by $100 Million," Accessed Mar. 15, 2020.
Southwestern Energy Co. "Southwestern Energy Announces Fourth Quarter and Full Year 2019 Results; Provides 2020 Guidance," Accessed Mar. 15, 2020.
Northern Oil & Gas Inc. "Northern Oil and Gas, Inc. Announces Management Transition and Promotions," Accessed Mar. 15, 2020.
Canacol Energy Ltd. "Canacol Energy Ltd. Starts Production and Sale of LNG," Page 1. Accessed Mar. 15, 2020.