Top oil and gas penny stocks for the second quarter include Athabasca Oil Corp., China Petroleum & Chemical Corp., and Africa Oil Corp., which have climbed by as much as 54% while the broader industry and market have slumped.
Despite a decline in oil and gas prices in the latter part of 2022 and a large-scale shift toward green energy, forecasts suggest demand for oil will remain robust for years to come. Oil and gas penny stocks, typically trading below $5 per share, could benefit from consistent demand.
Oil and gas penny stocks are generally represented by an exchange-traded fund—the Invesco S&P SmallCap Energy ETF (PSCE)—though, the fund also includes microcap and small-cap stocks that are not considered penny stocks. PSCE declined by 6% in the last year while the small-cap Russell 2000 Index has fallen 10%.
Here are the top three oil and gas penny stocks with the best value, the fastest growth, and the most momentum. All data are as of April 9.
Best Value Oil and Gas Penny Stocks
These are the oil and gas penny stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows that you’re paying less for each dollar of profit generated.
|Best Value Oil and Gas Penny Stocks|
|Price ($)||Market Capitalization (Market Cap) ($M)||12-Month Trailing P/E Ratio|
|Ring Energy Inc. (REI)||2.06||372.1||2.2|
|Gran Tierra Energy Inc. (GTE)||0.90||311.5||2.4|
|PetroTal Corp. (PTALF)||0.56||493.5||2.7|
- Ring Energy Inc.: Ring Energy is an independent oil and gas exploration firm that acquires and develops properties in the Permian Basin and Mid-Continent region of the U.S. Shares of Ring plunged in June 2022 alongside falling crude oil prices. Earnings declined in the latest quarter due to a commodity derivative loss.
- Gran Tierra Energy Inc.: Gran Tierra is a Canadian oil and gas exploration and production company with operations in South America. Earnings per share (EPS) more than tripled in the latest quarter as oil sales surged.
- PetroTal Corp.: PetroTal is a Canadian oil and gas development and production company. It owns a 100% working interest in the Bretana oil field in Peru. Net income per share quadrupled for the fourth quarter of 2022 due to increasing realized sale prices, among other factors.
Fastest Growing Oil and Gas Penny Stocks
These are the top oil and gas penny stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 1,000% were excluded as outliers.
|Fastest Growing Oil and Gas Penny Stocks|
|Price ($)||Market Cap ($M)||EPS Growth (%)||Revenue Growth (%)|
|Trican Well Service Ltd. (TCW.TO)||CA$3.00||CA$686.4||175.0||51.2|
|Tellurian Inc. (TELL)||1.42||800.2||N/A (see description below)||375.2|
|Ultrapar Participacoes SA (UGP)||2.82||3,071.1||129.0||19.6|
- Trican Well Service Ltd.: Trican is a Canadian well-servicing equipment company that provides engineering support, laboratory services, well equipment, and chemical sales services to the Canadian oil and gas industry. Trican's revenue grew by more than 50% to $866.3 million in the last quarter of 2022 as a result of stronger industry activity and a more constructive pricing environment.
- Tellurian Inc.: Tellurian is an energy company focused on natural gas production, liquid natural gas marketing, and infrastructure assets. Its operations include a terminal facility, pipelines, and upstream natural gas assets. Tellurian quadrupled its natural gas production in the fourth quarter of 2022 after acquiring 5,000 net acres and 44 wells from EnSight Energy. It does not have an EPS growth figure in the table above because EPS went from negative to positive over the period in question.
- Ultrapar Participacoes SA: Ultrapar is a Brazilian firm that distributes and sells fuel, liquefied petroleum gas, and other chemicals. It also engages in retail pharmacy and liquid storage businesses, among others. Earnings performance was due to higher revenues across all businesses and particularly at the company's Ipiranga operations.
Oil and Gas Penny Stocks With the Most Momentum
These are the oil and gas penny stocks that had the highest total return over the last 12 months.
|Oil and Gas Penny Stocks With the Most Momentum|
|Price ($)||Market Cap ($M)||12-Month Trailing Total Return (%)|
|Athabasca Oil Corp. (ATHOF)||2.44||1,431.1||54.4|
|China Petroleum & Chemical Corp. (SNPMF)||0.60||72,177.6||39.8|
|Africa Oil Corp. (AOI.TO)||CA$2.98||CA$1,377.4||38.8|
|Russell 1000 Index||N/A||N/A||-7.5|
|Invesco S&P SmallCap Energy ETF (PSCE)||N/A||N/A||-6.4|
- Athabasca Oil Corp.: Athabasca is a Canadian oil and gas developer and producer. Its operations include oil sands and other properties in the Athabasca region of northern Alberta. In the fourth quarter of 2022, the company achieved its lowest-ever debt level and exceeded production targets.
- China Petroleum & Chemical Corp.: China Petroleum & Chemical, also known as Sinopec, is a producer and marketer of gasoline, diesel, jet fuel, and other petroleum and related products. It serves customers throughout China. Shares have risen substantially since September 2022, but the company's stock is well below its peak in 2018.
- Africa Oil Corp.: Africa Oil is a Canadian oil and gas exploration and production company with operations in Ethiopia and Kenya. Between September 2022 and February 2023, the company bought back 20.2 million shares—4.2% of all available shares—for $44.8 million. The company is authorized to spend another $45 million on buybacks by September 2023.
Advantages of Oil and Gas Penny Stocks
Growth Potential: Oil and gas penny stocks have the potential for significant growth as a result of their small market capitalizations and the possibility of developing high-yielding properties.
Smaller Investment: Not much capital is needed to begin trading oil and gas penny stocks. Just a few hundred dollars can buy an investor thousands of shares, allowing for a quick profit if the stock price moves favorably.
Risks of Investing in Oil and Gas Penny Stocks
Oil and gas companies, and their investors, face risks such as rapid shifts in supply and demand and changes in government regulations. Finally, climate change poses a long-term risk as energy use shifts from fossil fuels and to alternative energy sources. Amid these sweeping changes, oil and gas penny stocks face added uncertainty given their small size, modest market share, and relative lack of financial resources compared to larger companies.
Oilprice.com. "Oil Demand Set To Remain Strong For Years To Come."
U.S. Energy Information Administration. "Crude oil prices increased in first-half 2022 and declined in second-half 2022."
YCharts. “Financial Data.”
Ring Energy Inc. "Ring Energy Announces Record Fourth Quarter and Full Year 2022 Results, Nearly 80% Increase in Year-End 2022 Proved Reserves and Provides 2023 Guidance."
Gran Tierra Energy Inc. "Gran Tierra Energy Inc. Announces 2022 Fourth Quarter & Year-End Results, Including Record Net Income, Funds Flow from Operations and Free Cash Flow."
PetroTal Corp. "PetroTal Announces 2022 Year-End Financial and Operating Results."
Trican Well Service Ltd. "TRICAN REPORTS ANNUAL RESULTS FOR 2022 AND DECLARES QUARTERLY DIVIDEND," Page 1.
Tellurian Inc. "Tellurian Completes Haynesville Basin Acquisition."
Tellurian Inc. "Tellurian Reports Fourfold Increase in Natural Gas Production In 2022."
Ultrapart Participacoes SA. "4Q2022 Earnings Release," Pages 1, 4.
Athabasca Oil Corp. "Athabasca Oil Announces 2022 Year‐end Results & Reserves, Record Cash Flow and Plans toExecute a Share Buyback Program," Page 1.
Africa Oil Corp. "Report to Shareholders for the Year Ended December 31, 2022." Page 3.
Africa Oil Corp. "Share Buyback Program."