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Top Oil and Gas Penny Stocks for Q3 2022

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The oil and gas penny stock universe is composed 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., Abraxas Petroleum Corp., and Falcon Minerals Corp.

Oil and gas penny stocks are generally represented by an exchange-traded fund—the Invesco S&P SmallCap Energy ETF (PSCE). However, the fund also includes many microcap and small-cap stocks that are not considered penny stocks. PSCE has dramatically outperformed the broader market with a total return of 33.7% over the past 12 months, significantly higher than the -13.2% total return of the Russell 1000 Index. These market performance numbers above and all statistics in the tables below are as of June 14, 2022.

Russia’s invasion of Ukraine in late February has disrupted oil supplies and driven oil prices sharply higher. In an attempt to bring down gasoline prices, on March 31 President Biden ordered the largest release ever from the U.S. emergency oil reserve. The plan was to release 1 million barrels per day (B/D) of crude oil from the Strategic Petroleum Reserve (SPR) for six months starting in May. But oil prices are now higher than they were when the announcement was first made. Officials from the Biden administration say the price would be higher had it not tapped the SPR.

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

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
Kolibri Global Energy Inc. (KEI.TO CA$2.40 CA$85.5 0.5
Perpetual Energy Inc. (PMT.TO) CA$1.66 CA$105.4 1.3
Petrus Resources Ltd. (PRQ.TO) CA$2.69 CA$287.0 2.3

Source: YCharts

  • Kolibri Global Energy Inc.: Kolibri Global Energy is an international energy company. It is focused on developing projects in oil, gas, and clean and sustainable energy. The company announced in early May financial results for Q1 of its 2022 fiscal year (FY), the three-month period ended March 31, 2022. The company’s net loss widened to $2.5 million from $0.5 million in the year-ago quarter despite total revenue net of royalties expanding 69.7% YOY. The company’s financing expenses rose more than three and a half times, contributing to the greater net loss compared to the year-ago quarter.
  • Perpetual Energy Inc.: Perpetual Energy is a Canada-based oil and gas exploration, production, and marketing company. It owns a diversified portfolio that includes conventional natural gas and heavy crude oil assets.
  • Petrus Resources Ltd.: Petrus Resources is a Canada-based energy company focused on exploration and strategic acquisitions. Its portfolio includes oil and natural gas development assets, which are located primarily in Alberta.

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 2,500% were excluded as outliers.

Fastest Growing Oil and Gas Penny Stocks
  Price ($) Market Cap ($M) EPS Growth (%) Revenue Growth (%)
CWC Energy Services Corp. (CWC.V) CA$0.28 CA$142.6 1,050 65.5
Tidewater Midstream and Infrastructure Ltd. (TWM.TO) CA$1.53 CA$523.0 400.0 82.9
Martin Midstream Partners LP (MMLP) 4.29 166.7 383.3 38.9

Source: YCharts

  • CWC Energy Services Corp.: CWC Energy Services is a Canada-based contract drilling and well servicing company. It provides a range of services, including for drilling rigs, service rigs, and swabbing rigs, which are used to remove fluid from a drilling production zone.
  • Tidewater Midstream and Infrastructure Ltd.: Tidewater Midstream and Infrastructure is a Canada-based midstream and infrastructure company. The company is focused on developing oil and gas infrastructure, such as gas plants, pipelines, export terminals, and more. Tidewater announced in mid-May financial results for Q1 FY 2022, which ended March 31, 2022. The company’s net income attributable to its shareholders rose nearly fivefold on revenue growth of 82.9% compared to the year-ago quarter.
  • Martin Midstream Partners LP: Martin Midstream Partners is a diversified energy services company. The company is focused on the Gulf Coast region where it provides storage, transportation, and other services to independent oil and gas companies. Martin Midstream Partners announced in late April financial results for Q1 FY 2022, which ended March 31, 2022. Net income rose 357.7% on revenue growth of 38.9% as the company benefitted from increased refinery utilization and strong demand for its services and products. The company’s net interest expense was lower in the most recent quarter compared to the year-ago quarter, helping to boost net income.

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 (%)
Perpetual Energy Inc. (PMT.TO) CA$1.66 CA$105.4 503.6
Pine Cliff Energy Ltd. (PNE.TO) CA$1.73 CA$594.1 369.8
InPlay Oil Corp. (IPO.TO) CA$4.12 CA$356.5 320.4
Russell 1000 N/A N/A -13.2
Invesco S&P SmallCap Energy ETF (PSCE) N/A N/A 33.7

Source: YCharts

  • Perpetual Energy Inc.: See above for company description.
  • Pine Cliff Energy Ltd.: Pine Cliff Energy is a Canada-based natural gas and oil company. It is focused on developing and operating natural gas, crude oil, and natural gas liquids (NGLs) assets.
  • InPlay Oil Corp.: InPlay Oil is a Canada-based crude oil and natural gas exploration, development, and production company. It develops petroleum and natural gas properties, and produces crude oil, natural gas, and NGLs. InPlay Oil announced in May financial results for Q1 FY 2022, which ended March 31, 2022. The company reported a profit of CA$18.8 million ($14.5 million), a significant improvement from the loss of CA$7.5 million reported in the year-ago quarter. Revenue rose 137.6% YOY.

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