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 Kosmos Energy Ltd. (KOS), Abraxas Petroleum Corp. (AXAS), and SM Energy Co. (SM).

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 outperformed the broader market with a total return of 184.4% over the past 12 months, nearly three times the Russell 1000's total return of 62.7%, as of March 29, 2021. All statistics in the tables below are also as of March 29.

Here are the top 3 oil and gas penny stocks with the best value, the fastest 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
Ultrapar Participacoes SA ( UGP) 3.67 3,993 23.3
Helix Energy Solutions Group Inc. ( HLX) 4.85 731.0 34.6
Falcon Minerals Corp. ( FLMN) 4.50 387.5 75.0

Source: YCharts

  • Ultrapar Participacoes SA: Ultrapar Participacoes is a Brazil-based holding company whose subsidiaries provide gas and petrochemical storage and distribution services.
  • 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 industry. In early March, Helix Energy Solutions announced that it had entered into an agreement with HWCG LLC, a consortium of deepwater oil and gas companies. Under the terms of the agreement, Helix will make available offshore well intervention and well control services, called the Helix Fast Response System, in the Gulf of Mexico for an annual retention fee. Helix developed its skills in well control and containment during the Macondo Deepwater Horizon blowout in 2010.
  • Falcon Minerals Corp.: Falcon Minerals is an energy company that acquires, drills, and develops oil and natural gas assets. The company serves customers in the U.S. For Q4 2020, Falcon Minerals' net income attributed to shareholders was down nearly 85% year-over-year (YOY), while total revenue was down by 27.2% YOY. Due to several positive factors, the company said it expects improvement in 2021, including 10% growth in its base business.

Fastest Growing Oil and Gas Penny Stocks

These are the oil and gas penny stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.

Fastest Growing Oil and Gas Penny Stocks

 
Price ($) Market Cap ($M) EPS Growth (%) Revenue Growth (%)
Headwater Exploration Inc. ( HWX.TO) CA$3.85 CA$751.2 1,200 186.8
Peyto Exploration & Development Corp. ( PEYUF) 4.24 699.4 1,930 -3.5
CES Energy Solutions Corp. ( CEU.TO) CA$1.63 CA$412.6 275.0 -32.6

Source: YCharts

  • Headwater Exploration Inc.: Canada-based Headwater Exploration is an oil and natural gas producer serving customers in Canada. The company explores and develops properties in New Brunswick and Alberta.
  • Peyto Exploration & Development Corp.: Peyto Exploration & Development is a Canada-based oil and gas company involved in the exploration and production of unconventional natural gas resources in Alberta, Canada. In March, the company confirmed that it would pay a dividend of $0.01 per common share on April 15, 2021, for shareholders of record as of March 31.
  • CES Energy Solutions Corp.: CES Energy Solutions is a Canada-based commercial services company providing fluids drilling, specialty chemical production, waste and water management, and other services. The company serves customers in the U.S. and Canada. Net income for Q4 2020 grew by 239.7% YOY as total revenue declined by 32.6% YOY. The company said the negative forces affecting CES Energy for most of 2020 subsided in Q4 due to the news of successful COVID-19 vaccines nearing final regulatory approval. CES has benefited from the reversal of temporary production shut-ins across major basins and an improvement in drilling and completion activity.

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 (%)
Peyto Exploration & Development Corp. (PEYUF) 4.24 699.4 340.1
Headwater Exploration Inc. (HWX.TO) CA$3.85 CA$751.2 281.2
CES Energy Solutions Corp. (CEU.TO) CA$1.63 CA$412.6 181.6
Russell 1000 N/A N/A 62.7
Invesco S&P SmallCap Energy ETF (PSCE) N/A N/A 184.4

Source: YCharts

  • Peyto Exploration & Development Corp.: See company description above.
  • Headwater Exploration Inc.: See company description above.
  • CES Energy Solutions Corp.: See company description above.

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