Home Market News Unveiling Hidden Gems: 3 Promising Oil & Gas Penny Stocks with Potential for 100% Gains by 2025

Unveiling Hidden Gems: 3 Promising Oil & Gas Penny Stocks with Potential for 100% Gains by 2025

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Unveiling Hidden Gems: 3 Promising Oil & Gas Penny Stocks with Potential for 100% Gains by 2025

Amidst the recent surge in crude oil prices, the outlook for oil & gas companies appears promising. The International Energy Agency foresees a supply deficit until 2024, primarily hinging on OPEC’s production cuts. However, the rise in oil prices is not the sole catalyst; anticipated rate cuts and expansionary monetary policies will likely boost GDP growth, propelling crude oil higher on the global stage.

Embracing this bullish sentiment, I turn our attention to oil & gas penny stocks. These under-the-radar stocks harbor immense potential for growth, with projections suggesting a staggering 100% surge by the conclusion of 2025. Rooted in the anticipation of escalating oil prices and geopolitical tensions, the highlighted penny stocks depict undervalued entities boasting solid fundamentals and a promising cash flow trajectory.

Let’s delve into the reasons underpinning the optimism surrounding these oil & gas penny stocks.

Riding the Wave: Ring Energy (REI)

Ring Energy (NYSE:REI) emerges as a gem among undervalued oil and gas penny stocks poised for substantial growth. Despite a 34% return in the past month, the 12-month trajectory of REI stock has remained flat.

Ring Energy currently holds a market valuation of $370 million, while its PV10 stands at a notable $1.65 billion. Moreover, with a proved reserves life of 19.6 years, the company boasts clear revenue visibility.

In the realm of finances, Ring Energy reported a 4% revenue growth to $361.1 million in 2023. Simultaneously, the adjusted EBITDA surged by 21% year-on-year to $236 million. As oil prices ascend, the company stands well-positioned for robust EBITDA and cash flow expansion.

The strategic pursuit of acquisitions by Ring Energy, coupled with a leverage of 1.62x, signals a roadmap for continued production growth.

Setting Sail for Success: Nordic American Tankers (NAT)

Nordic American Tankers (NYSE:NAT) positions itself as an appealing penny stock investment, offering a sturdy dividend yield. Sporting a forward price-earnings ratio of 7.3 and an 11.8% dividend yield, NAT stock exudes undervaluation.

Over the past 12 months, NAT stock has maintained a stable trajectory. Fueled by the company’s fleet of 20 tankers, I anticipate a 100% total return by the culmination of 2025 buoyed by the prevailing valuation.

Noteworthy is NAT’s average time charter equivalent rate of $39,170 per day per ship in 2023, juxtaposed with an operating cost of $9,000 per day per ship. These robust TCE rates have underscored strong cash flow dynamics for the company.

Amidst debt level per vessel at $11.6 million, Nordic American Tankers sits in a prime position for fleet expansion if buoyant TCE rates persist.

Chasing the Horizon: Athabasca Oil (ATHOF)

Athabasca Oil (OTCMKTS:ATHOF) has witnessed a commendable 95% surge in the past year, yet the stock retains its allure, poised for a potential double from its current $3.9 threshold.

Bolstering its appeal, Athabasca Oil flaunts a robust reserve base with 1.2 billion barrels of oil equivalent proved reserves, alongside one billion BOE in contingent resources. With 2P reserves boasting an NPV10 of $5.3 billion, the company, with a $2.2 billion market valuation, portrays a stark undervaluation.

Reporting an adjusted fund flow of $295 million in 2023, Athabasca forecasts an AFF of $460 million in the current year and anticipates generating over $1 billion in free cash flows between 2024 and 2026. Armed with quality assets and financial flexibility, Athabasca positions itself for production upsurge and value enhancement.

Editor’s Note: With prudence in mind, it’s crucial to note that the companies mentioned hold substantial market cap sizes and are excluded from the realm of low-volume “penny stocks” susceptible to market manipulation.

Explore Further: Discover a wealth of knowledge on navigating the world of penny stocks with our comprehensive guide.

As of the publication date, the author, Faisal Humayun, maintains no direct or indirect positions in the stocks covered. The viewpoints expressed herein are solely reflective of the author’s analysis and adherence to InvestorPlace.com guidelines.

Faisal Humayun, a seasoned research analyst with over 12 years of experience in credit research, equity research, and financial modeling realms. Possessing a repository of 1,500+ stock-specific articles, Faisal delves deep into the technology, energy, and commodities sectors.