Top Oil and Gas Stocks for Q1 2022

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

Oil demand and prices collapsed in the spring of 2020 as COVID-19 prompted governments to shut down commerce and require millions of people to stay at home. However, crude oil prices recovered after governments gradually permitted businesses to reopen in the past year amid rising vaccinations worldwide. Crude oil prices pulled back briefly in December amid the rapid spread of the Omicron variant of COVID-19.

The oil & gas industry is best represented by the Energy Select Sector SPDR ETF (XLE). While the energy sector consists of non-oil & -gas companies, its dominant components are from the oil & gas industry. Therefore, the energy sector’s performance is a good benchmark for the oil & gas sector as a whole. The XLE ETF posted a total return of 55.0% over the last year, outperforming the Russell 1000’s 24.4% total return by a wide margin. These market performance figures and all statistics in the tables below are as of Jan. 6, 2022.

Here are the top 3 oil and gas stocks with the best value, the fastest growth, and the most momentum.

These are the oil and gas 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.

Best Value Oil and Gas Stocks
  Price ($) Market Cap ($B) 12-Month Trailing P/E Ratio
Surge Energy Inc. (SGY.TO) CA$5.06 CA$0.4 0.8
California Resources Corp. (CRC) 43.44 3.5 1.0
Obsidian Energy Ltd. (OBELF) 5.14 0.4 1.2

Source: YCharts

  • Surge Energy Inc.: Surge Energy is a Canada-based oil exploration and production (E&P) company. It explores, develops, and produces oil and gas properties primarily located in western Canada.
  • California Resources Corp.: California Resources is an independent oil and natural gas exploration & production company with operations located in California.
  • Obsidian Energy Ltd.: Obsidian Energy is a Canada-based oil and natural gas developer and producer. The company explores, develops, and holds interests in oil and natural gas properties in western Canada, primarily in Alberta. In early Jan. 2022, Obsidian Energy announced that it had successfully completed its 2021 development program, which included drilling 35 high working interest wells. The company also said that it expects the company’s 2021 average production to be near at the low end of the range of its guidance of 24,600 to 24,800 barrels of oil equivalent (BOE).

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 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 or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.

Fastest Growing Oil and Gas Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
ARC Resources Ltd. (ARX.TO) CA$11.98 CA$8.4 N/A (see company description) 462.8
Liberty Oilfield Services Inc. (LBRT) 12.17 2.3 N/A (see company description) 343.2
Whiting Petroleum Corp. (WLL) 70.45 2.8 N/A (see company description) 337.8

Source: YCharts

  • ARC Resources Ltd.: ARC Resources is a Canada-based oil and gas company focused on exploration, development, and production of crude oil, condensate, natural gas, and related products. The company has operations in British Columbia and Alberta. For Q3 2021, ended Sept. 30, the company reported net income of CA$53.6 million, as compared with net losses for the prior-year quarter, while total revenue, interest and other income and loss on risk management contracts rose more than five-fold year-over-year (YOY). The company does not have an EPS growth figure in the table above because it moved from negative to positive over the period in question.
  • Liberty Oilfield Services Inc.: Liberty Oilfield Services provides hydraulic fracturing and wireline services to onshore oil and gas exploration and production companies. The company has operations across North America. For Q3 2021, Liberty reported narrowing net losses as revenue more than quadrupled YOY. The company said that a rise in activity and service pricing drove revenue gains. The company does not have an EPS growth figure in the table above because it had negative EPS for both Q3 2020 and Q3 2021, making a growth calculation impossible.
  • Whiting Petroleum Corp.: Whiting Petroleum is an independent oil and gas company focused on producing oil, natural gas, natural gas liquids, and related products. The company produces on properties in North Dakota and Colorado. The company does not have an EPS growth figure in the table above because it went from negative to positive EPS over the period in question.

These are the oil and gas stocks that had the highest total return over the last 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 (%)
NuVista Energy Ltd. (NVA.TO) CA$7.12 CA$1.6 612.0
Athabasca Oil Corp. (ATHOF) 0.98 0.5 529.7
Obsidian Energy Ltd. (OBELF) 5.14 0.4 499.9
Russell 1000 Index N/A N/A 24.4
Energy Select Sector SPDR ETF (XLE) N/A N/A 55.0

Source: YCharts

  • NuVista Energy Ltd.: NuVista Energy is a Canada-based oil and gas exploration and production company. Its focus is the development and production of oil and gas in the Western Canadian Sedimentary Basin. For Q3 2021, NuVista announced that it drilled 14 and started up six new wells. The company said that well results exceeded management expectations.
  • Athabasca Oil Corp.: Athabasca Oil is a Canada-based exploration and production company. It focuses on developing thermal oil and light oil resource properties in western Canada.
  • Obsidian Energy Ltd.: 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 to 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 on 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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