As summer comes to a close, it’s time to look at your consider which oil stocks to avoid in August.
Investing in energy companies, especially oil stocks, can be a good idea for an investor looking to diversify and gain exposure to more portions of the overall market.
It’s just essential for investors to have some grasp on the oil market and pricing so that they get into the market at more of a low point in oil prices, which is why oil stocks to avoid in August should be on your mind.
At its peak in the middle of 2022, oil prices were hovering around $110-$120 a barrel. Towards the tail end of 2022, oil prices began falling to $70 a barrel just a year later.
The oil stocks to avoid in August I have mentioned below have seen a drop in their share price over the past year. It will be interesting to see how they handle the oil market, which is less forgiving for energy companies than a year ago.
HighPeak Energy (HPK)
HighPeak Energy (NASDAQ:HPK) was created in 2019 and started trading publicly in 2020 through a special purpose acquisition corporations called Pure Acquisition Corp.
HighPeak’s operations are located within the Midland Basin in Western Texas.
Over the past year, the company’s share price has fallen approximately 31%. On Aug. 7, the company resale its second-quarter earnings for 2023. Their total revenue grew by 20%, and earnings per share dropped by 61% compared to the previous year. They also announced a second-quarter dividend of $0.025 per share.
At the end of July, HighPeak stated that they closed their underwritten public offering of 14.8 million shares which sold for $151 million. They did this to help with near-term liquidity.
W&T Offshore (WTI)
W&T Offshore (NYSE:WTI) is an oil and natural gas company focusing on acquiring, exploring, and developing various properties in the Gulf of Mexico. The company has successfully drilled 50 different wells offshore since 2011. The company operates shelf and deepwater leases.
W&T Offshore has seen its share price drop by 23% this past year. Their most recent earnings report, released on Aug. 1, stated a total revenue decline of 54% and a net loss of $12 million.
The company has a 100% working interest in two new leases in the Gulf of Mexico which combined cover approximately 10,000 acres. In mid-June, the company announced it would appoint Sameer Parasnis CFO and executive vice president of W&T Offshore.
Devon Energy (DVN)
Devon Energy (NYSE:DVN) is an independent energy company that explores oil and natural gas reserves in North Dakota, Wyoming, New Mexico, Texas, and Oklahoma.
Over the past year, the company’s share price has fallen by 10%. Devon Energy released its first-quarter earnings report on May 8. Their total revenue remains practically unchanged, and net income grew by less than a percent compared to the first quarter of 2022.
Devon Energy’s board of directors agreed to increase their share buyback program by 50% to $3 billion.
Their Eagle Ford property in Texas saw a 90% production increase due to the Validus acquisition and the introduction of 26 new wells in the area.
In September 2022, Devon Energy completed its acquisition of Validus Energy, an operating energy company in Eagle Ford.
The addition gave Devon Energy access to 42,000 acres near their existing operations in Eagle Ford, which helped dramatically increase their output in the area. The total cash consideration of the acquisition was $1.8 billion.
As of this writing, Noah Bolton did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
