Top Oil and Gas Penny Stocks for Q4 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 34.4% over the past 12 months, significantly higher than the -13.8% total return of the Russell 1000 Index. These market performance numbers above and all statistics in the tables below are as of Sept. 16, 2022.

Russia’s invasion of Ukraine in late February disrupted oil supplies and initially drove oil and gas prices sharply higher. In response, President Biden issued an order to release millions of barrels of oil from the U.S. Strategic Petroleum Reserve. This, along with efforts to increase production and bolster global supply, helped to contribute to declining gas prices in the last several months. As of late August, U.S. gas prices fell to pre-Ukraine invasion levels.

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
ROK Resources Inc. (ROK.V) CA$0.34 CA$66.4 0.6
TransGlobe Energy Corp. (TGA) 3.10 227.3 1.8
Journey Energy Inc. (JRNGF) 3.85 203.0 1.9

Source: YCharts

  • ROK Resources Inc.: ROK Resources is a petroleum and natural gas development and production company based in Canada. Its primary operations are in Alberta and Saskatchewan. ROK shares trade over-the-counter in the U.S. under the ticker PTRDF. On Aug. 29 the company reported earnings for Q2 2022. Its net loss widened significantly year-over-year (YOY) as total operating income increased substantially. Operating income growth was impacted by significant gains in oil and natural gas sales, partially offset by losses in the company’s royalties business and significant increases in operating expenses.
  • TransGlobe Energy Corp.: TransGlobe Energy is a Canada-based oil and gas development and exploration company. Its activities primarily take place in Egypt and Alberta, Canada. In mid-July, the company announced that it had entered into a definitive agreement through which VAALCO Energy Inc. (EGY) will acquire all outstanding TransGlobe shares in a stock-for-stock deal valued at $307 million. The transaction, which needs approval by the Court of Queen’s Bench of Alberta and other parties, is expected to close later in the second half 2022.
  • Journey Energy Inc.: Journey Energy is a Canada-based company that explores, develops, and produces natural gas and oil properties. Its operations are primarily in western Canada.

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 (%)
PetroTal Corp. (PTALF) 0.54 458.9 800.0 172.4
Lucero Energy Corp. (LOU.V) CA$0.62 CA$410.3 300.0 111.2
TransGlobe Energy Corp. (TGA) 3.10 227.3 300.0 47.5

Source: YCharts

  • PetroTal Corp.: PetroTal is a Canada-based oil and gas development and production company. It owns a 100% working interest in the Bretana oil field in Peru. On Aug. 25 PetroTal reported Q2 2022 earnings results. Net income surged nearly seven-fold while revenue almost tripled year-over-year (YOY). Record quarterly production and sales contributed to growth.
  • Lucero Energy Corp.: Lucero Energy is an oil and gas exploration and production company with operations focused on the North Dakota Bakken. The company released Q2 2022 earnings results on Aug. 4. Net income grew more than seven-fold on strong operating netback growth and rising production YOY.
  • TransGlobe Energy Corp.: See company description above.

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 (%)
Hugoton Royalty Trust (HGTXU) 2.85 114.0 1,770
ECA Marcellus Trust I (ECTM) 2.85 50.2 492.9
Journey Energy Inc. (JRNGF) 3.85 203.0 239.8
Russell 1000 N/A N/A -13.8
Invesco S&P SmallCap Energy ETF (PSCE) N/A N/A 34.4

Source: YCharts

  • Hugoton Royalty Trust: Hugoton Royalty Trust is a trust that owns net profit interests in natural gas producing properties. The properties are located primarily in Kansas and Oklahoma.
  • ECA Marcellus Trust I: ECA Marcellus Trust I owns royalty interests in natural gas wells in locations includingPennsylvania. On Aug. 9 the trust announced a quarterly distribution of $0.176 per unit, which was distributed Aug. 31 to shareholders as of Aug. 19, 2022.
  • Journey Energy Inc.: See company description above.

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. While 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.

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