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 Oasis Petroleum Inc. (OAS), Abraxas Petroleum Corp. (AXAS), and SM Energy Co. (SM). Oil and gas penny stocks are represented by the Invesco S&P SmallCap Energy ETF (PSCE), though the fund includes many small cap stocks that are not considered penny stocks. The PSCE has dramatically underperformed the broader market with a total return of -54.3% compared to the S&P 500’s total return of 5.8% over the past 12 months. These market performance numbers and the statistics in the tables below are as of June 12.
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.
- QEP Resources Inc.: QEP Resources is an independent crude oil and natural gas exploration and production company. The company posted net income of $367.4 million for Q1 2020, a big improvement from the $116.7 million loss reported for the same three-month period a year ago. The company noted that the COVID-19 pandemic has created significant challenges for the industry.
- Northern Oil & Gas Inc.: Northern Oil & Gas is an oil and gas exploration and production company engaged in the acquisition, exploration, development, and production of crude oil and natural gas properties. The company recently announced that it had entered into a definitive agreement to acquire around 320 acres of core Williston Basin properties operated by WPX Energy Inc. (WPX). The closing of the deal is expected to take place on July 1, 2020.
- Callon Petroleum Co.: Callon Petroleum engages in the exploration, development, and acquisition of oil and natural gas properties, and production of related products. In Q1 2020 ending March 31, Callon’s profits swung to a net income of $216.6 million from a loss of $19.5 million in Q1 2019.
Fastest Growing Oil and Gas Penny Stocks
These are the oil and gas penny stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders. Plunging oil prices in the first quarter inflicted steep earnings declines or losses on many oil and gas companies. As a result, the top company in the growth category, Comstock Resources Inc., was the only one to report a percent increase in earnings. The two other companies among the top three saw dramatic improvements in earnings, but it was not possible to compute the percent change because their net income moved from negative to positive.
|Fastest Growing Oil and Gas Penny Stocks|
|Price ($)||Market Cap ($M)||EPS Growth (%)|
|Comstock Resources Inc. (CRK)||4.88||1.1||15.4|
|Callon Petroleum Co. (CPE)||1.42||563.7||Moved from negative to positive|
|QEP Resources Inc. (QEP)||1.56||377.8||Moved from negative to positive|
- Comstock Resources Inc.: Comstock Resources engages in the acquisition, development, exploration, and production of oil and natural gas properties. The company posted EPS growth of 15.4% on revenue growth of 78.0% for Q1 2020, which ended March 31, 2020. Company CEO M. Jay Allison said that the company’s natural gas operations in East Texas and North Louisiana have not been hurt by the COVID-19 pandemic. He said that Comstock will benefit in the future as low oil prices cause a reduction in activity in oil basins, leading to significant declines in natural gas supply in 2020 and 2021.
- Callon Petroleum Co.: See company description above.
- QEP Resources Inc.: See company description above.
Oil and Gas Penny Stocks with the Most Momentum
These are the oil and gas penny stocks that had the highest total return over the last 12 months. Only two companies had positive total returns because plunging oil prices sharply pushed down most stocks. While the third stock on our list had a negative return, it declined less than other companies.
|Oil and Gas Penny Stocks with the Most Momentum|
|Market Cap ($M)||12-Month Trailing Total Return (%)|
Contango Oil & Gas Co. (MCF)
Advantage Oil & Gas Ltd. (AAV.TO)
Southwestern Energy Co. (SWN)
|Invesco S&P SmallCap Energy ETF (PSCE)||N/A||N/A||-54.3|
- Contango Oil & Gas Co.: Contango Oil & Gas engages in the acquisition, exploration, development, and production of crude oil and natural gas properties.
- Advantage Oil & Gas Ltd.: Advantage is a Canadian oil and natural gas producer, with a focus on natural gas.
- Southwestern Energy Co.: Southwestern Energy is an energy company that engages in natural gas and oil exploration, development and production. The company posted a net loss of $1.5 billion and a 40.2% decline in operating revenues for Q1 2020, which ended March 31, 2020. The company cited the COVID-19 pandemic as one negative factor.