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 $5 per share. The oil and gas industry also includes companies that provide drilling and well-maintenance services. Some examples of these penny stocks include ProPetro Holding Corp. (PUMP), Range Resources Corp. (RRC), and SM Energy Co. (SM).
Oil and gas penny stocks, as represented by the Invesco S&P SmallCap Energy ETF (PSCE), have dramatically underperformed the broader market, posting a total return of -77.6% compared to the S&P 500's return of -3.9% over the past 12 months. These market performance numbers and the statistics in the tables below are as of April 21, 2020.
The early 2020 oil price war and the COVID-19 pandemic have driven oil prices to record lows as of late April, 2020. As a result, oil markets have become extremely volatile, and investing in the oil and gas sector has become substantially more risky than usual. Prices and data in this article were accurate at the time of writing, but likely have changed significantly as a result of the aforementioned market volatility.
Here are the top 3 oil and gas penny stocks with the best value, the fastest earnings growth, and the most momentum.
Best Value Oil and Gas Penny Stocks
These are the oil and gas penny stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Oil and Gas Penny Stocks|
|Price ($)||Market Cap ($M)||12-Month Trailing P/E Ratio|
Frontera Energy Corp. (FEC.TO)
|Noble Midstream Partners LP (NBLX)||4.07||367.3||1.2|
|Seven Generations Energy (VII.TO)||CA$2.15||CA$719.6||1.6|
- Frontera Energy Corp.: Frontera Energy is a Canadian oil and gas producer with operations in Guyana, Colombia, Ecuador, and Peru. On March 23, it announced a cost savings plan in which it eliminated its CFO, and cut planned 2020 capital expenditures by approximately 60%.
- Noble Midstream Partners LP: Noble Midstream Partners is a master limited partnership (MLP) created by Noble Energy (NBL) to own and operate its oil storage and refining infrastructure. On March 25, 2020, it cut its distribution by 73% as part of a cost-saving plan.
- Seven Generations Energy Ltd.: Seven Generations is a natural gas producer based in Canada. In order to cut costs in the face of lower energy prices, Seven Generations cut its 2020 capital investment budget by 18%.
Fastest Growing Oil and Gas Penny Stocks
These are the oil and gas penny stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Oil and Gas Penny Stocks|
|Price ($)||Market Cap ($M)||EPS Growth (%)|
|Clean Energy Fuels Corp. (CLNE)||1.77||360.5||566.7|
|Archrock Inc. (AROC)||4.06||620.7||200.0|
|Sasol Ltd. (SSL)||3.00||1,897||25.1|
- Clean Energy Fuels Corp.: Clean Energy Fuels Corp is a producer of renewable natural gas. That means they create natural gas from decomposing organic waste, rather than extracting it from underground deposits.
- Archrock Inc.: Archrock is a contract operations services company that provides maintenance, service, and equipment for oil and natural gas production, processing, and transportation applications.
- Sasol Ltd.: Sasol is a South African energy and chemical conglomerate. It is an integrated oil and gas company as well as a chemical producer.
Oil and Gas Penny Stocks with the Most Momentum
These are the oil and gas penny stocks that had the highest total return over the last 12 months. While these 3 stocks posted negative total returns during this period, their prices have fallen the least in sector that has been hammered by falling oil prices.
|Oil and Gas Penny Stocks with the Most Momentum|
|Market Cap ($M)||12-Month Trailing Total Return (%)|
|Tsakos Energy Navigation Ltd. (TNP)||3.17||303.3||-3.4|
Canacol Energy Ltd. (CNE.TO)
|Advantage Oil & Gas Ltd. (AAV.TO)||CA$1.89||CA$353.3||-11.7|
|S&P 500 (SPY)||N/A||N/A||-3.9%|
|Invesco S&P SmallCap Energy ETF (PSCE)||N/A||N/A||-77.6%|
- Tsakos Energy Navigation Ltd.: Tsakos is a Greek company that owns and operates oil and liquid natural gas tankers. It announced the sale of five tankers on March 6, 2020, in order to free up cash and reduce debt.
- 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.
- Advantage Oil & Gas Ltd.: Advantage is a Canadian oil and natural gas producer, with a focus on natural gas. On April 13, 2020, it announced it was selling a 12.5% interest in one of its natural gas processing plants for $100 million, in order to strengthen its balance sheet.
YCharts. "Financial Data," Accessed April 21, 2020.
Advantage Oil & Gas Ltd. "Advantage Announces Agreement to Sell 12.5% Interest in Glacier Gas Plant for $100 Million," Accessed April 21, 2020.
Seven Generations Energy. "SEVEN GENERATIONS ENERGY REDUCES 2020 CAPITAL INVESTMENT PLAN IN RESPONSE TO CHALLENGING GLOBAL ENERGY PRICES," Accessed April 21, 2020.
TSAKOS ENERGY NAVIGATION LIMITED. "TEN LTD ANNOUNCES SALE OF FIVE TANKERS, THREE SUEZMAXES AND TWO HANDYSIZE PRODUCT CARRIERS AND DATE OF FOURTH QUARTER AND YEAR END DECEMBER 31, 2019 FINANCIAL RESULTS, CONFERENCE CALL AND WEBCAST," Accessed April 21, 2020.
Canacol Energy Ltd. "Canacol Energy Ltd. Starts Production and Sale of LNG," Page 1. Accessed Mar. 15, 2020.