Top Oil and Gas Stocks for Q3 2022

FEC.TO, TELL, and STR are top for value, growth, and momentum, respectively

The oil and gas industry comprises upstream companies that explore and produce the energy sources, midstream pipeline companies that transport and store oil and gas, and downstream companies that refine the energy sources into finished products. Additionally, there are companies that provide oil field drilling equipment and services. Some also manufacture and maintain equipment used in production. Among the industry’s biggest companies are Netherlands-based Royal Dutch Shell PLC, U.K.-based BP PLC, and Exxon Mobil Corp.

Russia's invasion of Ukraine in February has significantly disrupted the global oil market. European Union leaders moved to ban most Russian crude oil imports in May a oil prices spiked in March. The Biden administration has released record volumes of oil from the U.S. strategic reserve and has urged both domestic and international oil producers to increase production. However, as of June gasoline prices remain at record high levels throughout much of the country.

The oil and gas industry is best represented by the Energy Select Sector SPDR ETF (XLE). The exchange-traded fund produced a total return of 59.8% over the past year, dramatically outperforming the Russell 1000’s -12.9% total return. Oil stock investors may also wish to follow the Bloomberg Composite Crude Oil Subindex and the Bloomberg Natural Gas Index. While they are not benchmarks, these two indexes measure oil and gas prices, which exert a strong influence on the profitability and performance of oil and gas stocks. These indices have provided total returns of 90.9% and 144.4% over the same period, respectively. These market performance figures and all statistics in the tables below are as of June 13, 2022.

Here are the top three oil and gas stocks with the best value, the fastest growth, and the most momentum, respectively.

Best Value Oil and Gas Stocks

These are the oil and gas stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. A low P/E ratio shows that you’re paying less for each dollar of profit generated. Profits can be returned to shareholders in the form of dividends and share buybacks.

Best Value Oil and Gas Stocks
  Price ($) Market Capitalization (Market Cap) ($B) 12-Month Trailing P/E Ratio
Frontera Energy Corp. (FEC.TO) CA$12.51 CA$1.2 1.3
Surge Energy Inc. (ZPTAF) 9.36 0.8 1.5
Crescent Point Energy Corp. (CPG) 9.69 5.5 2.0

Source: YCharts

  • Frontera Energy Corp.: Frontera Energy is a Canada-based company involved primarily in the exploration, development, production, transportation, storage, and sale of oil and natural gas in South America. Its asset portfolio includes interests in 34 exploration and production blocks in Colombia, Ecuador, and Guyana. On June 3, the company announced the immediate appointment of René Burgos Díaz as chief financial officer (CFO). He replaces Alejandro Piñeros, who is stepping down.
  • Surge Energy Inc.: Surge Energy engages in the exploration, development, and production of oil and gas properties in Western Canada, primarily in Alberta and Manitoba. The company is based in Canada.
  • Crescent Point Energy Corp.: Crescent Point Energy is a Canada-based oil production company. It has operations in Alberta, Saskatchewan, and North Dakota. On May 12, the company announced a Q2 2022 dividend of $0.065 per share. The dividend will be paid July 4 to shareholders of record as of June 15, 2022.

Fastest-Growing Oil and Gas Stocks

These are the top oil and gas stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (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 figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.

Fastest-Growing Oil and Gas Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Tellurian Inc. (TELL) 3.59 2.0 N/A (see company description below) 1,590
Civitas Resources Inc. (CIVI) 74.89 6.4 N/A (see company description below) 1,000
Whitecap Resources Inc. (SPGYF) 9.02 5.6 2,480 125.4

Source: YCharts

  • Tellurian Inc.: Tellurian is a natural gas company. It owns a portfolio of natural gas properties, including 100 drillable locations, and also markets liquefied natural gas and infrastructure assets. Its primary operations are in Louisiana. According to its form 10-Q for Q1 2022, Tellurian saw net losses widen year-over-year (YOY) for the quarter amid soaring operating expenses while total revenue surged dramatically. Revenue growth was due to both increased realized natural gas prices and production volumes as well as an increase in liquefied natural gas sales. Tellurian does not have an EPS growth figure in the table above because it had negative EPS for the quarter in question.
  • Civitas Resources Inc.: Civitas is an oil and gas production company. It acquires, develops, and produces oil, natural gas, and natural gas liquids in Colorado. Civitas' EPS went from negative to positive over the period in question, making an EPS growth calculation impossible.
  • Whitecap Resources Inc.: Whitecap Resources is a Canada-based oil and gas company with operations primarily in Alberta, British Columbia, and Saskatchewan. Whitecap reported Q1 2022 earnings on April 28. Net income surge by more than 33-fold as petroleum and gas revenues more than doubled YOY. Record production and strong commodity prices were factors influencing growth.

Oil and Gas Stocks with the Most Momentum

These are the oil and gas stocks that had the highest total return over the past 12 months. Companies with total returns over 2,500% were excluded as outliers.

Oil and Gas Stocks with the Most Momentum
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Sitio Royalties Corp. (STR) 26.99 0.3 607.7
BP Prudhoe Bay Royalty Trust (BPT) 22.52 0.5 477.5
Pine Cliff Energy Ltd. (PNE.TO) CA$1.82 CA$0.6 420.0
Russell 1000 Index N/A N/A -12.9
Energy Select Sector SPDR ETF (XLE) N/A N/A 59.8

Source: YCharts

  • Sitio Royalties Corp.: Sitio Royalties is a mineral and royalty company that owns and manages oil and gas properties as well as mineral and royalty interests. The company's operations are predominantly located in the Permian Basin region of the U.S.
  • BP Prudhoe Bay Royalty Trust: BP Prudhoe Bay Royalty Trust holds royalty interests in oil and natural gas properties in the U.S. It receives a per-barrel royalty on the production of oil from British Petroleum’s working interests in the North Slope of Alaska.
  • Pine Cliff Energy Ltd.: Pine Cliff Energy is an energy company based in Canada. It explores, develops, and produces properties related to natural gas and crude oil. It operates in Alberta, Saskatchewan, and other parts of western Canada. On May 4 the company announced it had launched a monthly dividend in the amount of $0.0083 per common share. The annualized dividend is $0.10 per share. The first monthly dividend will be paid June 30 to shareholders as of June 15, 2022.

The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. Though we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

Article Sources
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  1. CNBC. "These charts show how Russia’s invasion of Ukraine has changed global oil flows."

  2. Financial Times. "US oil producers ignore Biden’s rallying call to drill."

  3. YCharts. “Financial Data.”

  4. Frontera Energy Corp. "Frontera Announces Chief Financial Officer (CFO) Transition And Changes To Committee Membership."

  5. Crescent Point Energy Corp. "Crescent Point Announces Q1 2022 Results and Increases Quarterly Dividend."

  6. Tellurian Inc. "Form 10-Q for the quarterly period ended March 31, 2022," Pages 2, 18.

  7. Whitecap Resources Inc. "WHITECAP RESOURCES INC. ANNOUNCES RECORD FIRST QUARTER RESULTS AND DIRECTOR NOMINEE."

  8. Pine Cliff Energy Ltd. "Pine Cliff Energy Ltd. Announces Record Quarterly Results, Declaration of Monthly Dividend, Debt Repayment and Operational Update."

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