Nobody thought a barrel of oil would hit a negative price range, but this week it did just that. This was largely a result of two competing disasters squeezing the industry: COVID-19 and the ongoing oil price war between OPEC and Russia. As a result, oil and gas stocks are stuck between a rock and a hard place. But after prices fell so low that some companies were paying to have barrels of crude taken off their hands, the industry is seeing big gains again. Despite the panic, it was always clear that oil would bounce back. So for our list of hot penny stocks today, we’ve got all the best oil and gas stocks to buy from this recent rebound.
5 Hot Penny Stocks Today: Whiting Petroleum Corp (NYSE:WLL)
Based in Delaware, Whiting Petroleum Corporation is an independent oil and gas company. It explores for, develops, acquires, and produces crude oil, natural gas, and natural gas liquids primarily in the Rocky Mountain region. The company’s largest projects are in the Bakken and Three Forks regions in North Dakota, as well as the Niobrara play in northeast Colorado.
WLL was one of the worst-hit oil and gas stocks of the current crisis. On April 1, it became the first big name in the industry to file for bankruptcy on account of the oil price war. As recently as 2015, the company’s shares were trading over $150, but this month they sunk below $1.00. The company is also drowning in debt, further scaring investors away.
More than a dozen analysts initiated or updated their ratings for Whiting Petroleum in the last two months. The vast majority of them are recommending a “hold” position, indicating at least some optimism that WLL has a chance to rise again.
At the start of this week, WLL was at $0.34. Since then, it’s up 373.53% to now trade at $1.63. According to MarketBeat, the stock has a consensus price target of $8.81, representing a 444.03% upside from its current price.
5 Hot Penny Stocks Today: Oasis Petroleum Inc. (NASDAQ:OAS)
Oasis is an independent exploration and production company. It focuses on the acquisition and development of onshore, unconventional crude oil and natural gas resources in the United States.
>> 5 Oil Stocks in Focus as Bankruptcy Looms After Oil Price Crash
By the end of fiscal 2019, things were looking bright for the company. According to CEO Thomas B. Nusz: “Volumes exceeded expectations while spending was lower, driven by a relentless focus on efficiency.”
Unfortunately, things quickly started looking worse for OAS. From the start of the year to the second week of March, the stock lost nearly 90% of its value. The share price then hovered around $0.35 for the next seven weeks as analysts began returning bearish reports.
In the first few hours of trading today, however, OAS leaped 134.64%, from $0.29 to $0.67. Since then, it has consolidated back to $0.54, which remains its highest price since the COVID-19 crash began. According to MarketBeat, the stock still has an attractive consensus price target of $4.83, which represents a 793.41% upside from its current price.
5 Hot Penny Stocks Today: Unit Corporation (NYSE:UNT)
Based in Tulsa, Unit Corporation is a publicly held energy company. Through its subsidiaries, it is engaged in oil and gas exploration, production, and contract drilling, as well as gas gathering and processing.
Like OAS, the company closed its fiscal 2019 with improved performance, but sizable debt. Unit ended Q4 with long-term debt of $663.2 million, though oil production increased 12% year-over-year. The company had just initiated its drilling program at the Red Fork horizontal oil play when the price of oil crashed.
UNT fell 70% from the start of the year to the start of the week, steadily losing value the entire time. The stock saw a considerable amount of short interest at the end of March, indicating that some traders were expecting a more substantial crash around that time. While it never saw any major single-session losses, it never showed signs of gaining its value back either.
Until, that is, this morning. After hitting a low of $0.14 yesterday, UNT doubled to reach $0.29 earlier today. It’s currently trading at $0.25, which—according to analysts at Raymond James—is well under its expected price for the coming months. What’s more, a number of insider and institutional investors have recently increased their holdings in the company.
5 Hot Penny Stocks Today: Abraxas Petroleum Corp. (NASDAQ:AXAS)
Based in San Antonio, Abraxas is a crude oil and natural gas exploration and production company. It has operations across the Permian Basin, Rocky Mountain, and South Texas regions of the United States. As of December 31, 2018, its estimated net reserves were 67.2 million barrels of oil equivalent.
>> Crashing Oil Prices Boost Gold Price and Shine Spotlight on Low-Cost Gold Miners
As with the other oil and gas penny stocks on this list, AXAS has had a disappointing 2020. From the beginning of the year to yesterday, the stock lost more than 60% of its value. While that began before the COVID-19 crash or the oil price war, those factors certainly did not help.
In response to market conditions, Abraxas reduced expenses by approximately 40% and significantly cut capital expenditures. Approximately 95% of its current oil production is hedged at approximately $55 per barrel for the remainder of the year, while approximately 100% of its anticipated oil production for 2021 is hedged at approximately $58 per barrel.
This hedge position, currently worth over $50 million, will allow Abraxas to generate free cash flow for both years. The company has announced that these proceeds will be used to pay down its debt.
This better-than-competitor plan helped boost the share price, which rose 84.26% today. AXAS is currently trading at $0.23, which is significantly under its $1.00 consensus price target, according to MarketBeat. The majority of analysts currently recommend a “hold” position for the stock.
5 Hot Penny Stocks Today: KLX Energy Services Holdings Inc. (NASDAQ:KLXE)
KLX Energy Services is an onshore provider of oilfield services. It primarily focuses on completion, intervention, and production activities for technically demanding wells. The company enjoys a broad portfolio of specialized tools and equipment, including innovative proprietary tools developed by its in-house R&D team. It also has over 40 service facilities located in the major onshore oil and gas producing regions of the United States.
KLX Energy ended fiscal 2019 with a cash balance of approximately $124 million. It currently maintains an undrawn $100 million credit facility.
On March 9, the company announced a cost rationalization program in which it implemented a 22% reduction in force. This amounted to approximately 360 employees. About a month later, it announced an additional reduction in its workforce of approximately 170 employees. In addition, the company instituted a widespread wage reduction program.
Altogether, KLX Energy predicts this will amount to an approximate $68 million annualized reduction in costs.
As of yesterday, KLXE was down 87% from the start of the year, from $5.73 to $0.73. Today, however, it shot up more than 50% to reach $1.10. According to MarketBeat, analysts are split between “buy” and “hold” recommendations for the stock. KLXE’s consensus price target is $25.50, which represents a potential 2,384.17% upside from its current price.
Takeaway
While the price of oil is still relatively low, oil and gas penny stocks are by and far today’s biggest winners. Still, the large-cap companies have a long road ahead of them, as do many of the entries on our list of hot penny stocks today.
If you’re thinking about taking a position in any of the stocks on our list, make sure to do your own research first. Consider diversifying as well. Gold penny stocks, for example, have been doing remarkably well, which could add some much-needed stability to your portfolio.
Featured image: DepositPhotos © egorovartem
