Edge-ucation / Small Cap stocks / Trading

Top 5 Small-Cap Oil Stocks in 2022

  • Declan O’Flaherty

    Declan holds a Bachelor of Commerce from the University of Alberta and has over 2 years of experience investing in financial markets. As a value investor, Declan embraces the lessons of Warren Buffett and his disciples when making investing decisions. With an emphasis on business fundamentals, his strategy focuses on finding stocks with excellent management, a competitive advantage, and those that are selling at discount to their real value

An abandoned gas station in the middle of nowhere.

Top 5 Small-Cap Oil Stocks in 2022 – 4The oil and gas industry is one of the most polarizing markets in the world.

As the lifeblood of businesses and households alike, our economies depend on oil to help fuel trade and growth so that we may remain prosperous into the future.

While it is clear that these carbon-emitting energy sources are unsustainable in the long run, 2022 has demonstrated the importance of having a strong energy sector and what can happen when there isn’t enough supply to go around.

With oil and gas prices nearing 10-year highs, oil stocks are benefiting greatly as global economies increase their demand after a quiet stretch during the Covid-19 pandemic.

As such, the top 5 performing S&P 500 stocks are all oil and gas companies.

Reasons to Invest in Small-Cap Oil Stocks

Although it may be worthwhile for investors to purchase these massive large-cap businesses, there are better opportunities for retail investors in the small-cap market.

A small-cap stock is considered any stock with a market capitalization between $300 million and $2 billion.

Specific to the oil and gas industry, small-cap oil stocks have a unique advantage because they possess massive growth potential due to their size.

If they have the infrastructure and technology in place, and their businesses are fully operational, these small-cap companies are reaping the benefits of high oil and gas prices because the demand for their products is elevated at this time.

With so much demand, oil & gas stocks are swimming in cash flow as their profit margins widen, while their costs remain relatively the same.

This is excellent for retail investors because small-cap oil stocks with free cash flow are able to grow faster and more successfully than their competition, thus improving their value offering and increasing their market share. 

For more information on the advantages of small-cap stock investing, check out our article on what is a small-cap stock.

WTI crude price graph.
Top 5 Small-Cap Oil Stocks in 2022 – 5

Top Five Small-Cap Oil Stocks in 2022

1. Tenaz Energy (TNZ.TO)

Market Cap: $52.65 million CAD

Price: $1.85 CAD

YTD Change: -42.72%

CEO: Anthony Marino

Tenaz Energy Corp. (TSX: TNZ) is an energy company focused on acquiring international oil and gas assets that are both sustainable and free cash flow producing.

The company owns a variety that demonstrates these characteristics such as its semi-conventional oil project in Leduc, Alberta which is fully operational and offers a key competitive advantage in the area.

  • BOE per day: 1,015 BOE/d (2021)
  • Revenue by Products
    • Crude oil = $12.78 mil. (71.66%)
    • Natural Gas Liquids = $1.21 mil. (6.78%)
    • Natural Gas = $3.84 mil. (21.56%)
  • Debt to Revenue: 0.00%
  • Price to Book Value: 0.72
  • Operational Cash Flow (TTM): $4.28 million CAD

2. Cardinal Energy (CJ.TO)

Market Cap: $1.28 billion CAD 

Price: $7.87 CAD

YTD Change: +84.31%

CEO: M. Scott Ratushny

Cardinal Energy Ltd. (CJ.TO) is a Canadian oil and gas company that is focused on finding low declining and sustainable oil assets in Western Canada.

They operate in the provinces of Alberta and Saskatchewan with a well-balanced portfolio, and deep development drilling inventory.

  • BOE per day: 20,731 BOE/d (2021)
  • Revenue by Products
    • Crude oil = $413.12 mil. (92.82%)
    • Natural Gas Liquids = $11.95 mil. (2.68%)
    • Natural Gas = $20.00 mil. (4.49%)
  • Debt to Revenue: 34.82%
  • Price to Book Value: 1.58
  • Operational Cash Flow (TTM): $161.89 million CAD

3. Athabasca Oil Corp. (ATH.TO)

Market Cap: $1.28 billion CAD

Price: $2.24 CAD

YTD Change: +88.24%

CEO: Robert Broen

Athabasca Oil Corporation (TSX: ATH) is a well-diversified energy company that engages in the exploration, development, and production of light and thermal oil resources. 

They offer excellent exposure to oil prices by taking advantage of Canada’s most active resource plays like Montney, Duvernay, and the Oil Sands. 

  • BOE per day: 34,618 BOE/d (2021)
  • Revenue by Products
    • Crude oil = $1,013.75 mil. (95.70%)
    • Natural Gas Liquids = $30.144 mil. (2.85%)
    • Natural Gas = $15.395 mil. (1.45%)
  • Debt to Revenue: 29.22%
  • Price to Book Value: 1.33
  • Operational Cash Flow (TTM): $252.98 million CAD

4. Crew Energy Inc. (CR.TO

Market Cap: $778.60 million CAD

Price: $5.09 CAD

YTD Change: +77.97%

CEO: Dale O. Shwed

Crew Energy Inc. (TSX: CR) is a growth-oriented energy company engaging in the acquisition, exploration, development, and production of financially sustainable and socially responsible oil and gas projects. 

Its assets are primarily fixated in the vast Montney resource with access to a diversity of markets through pipeline infrastructure.

  • BOE per day: 26,443 BOE/d (2021)
  • Revenue by Products
    • Crude oil = $21.76 mil. (6.54%)
    • Natural Gas Liquids = $18.53 mil. (5.57%)
    • Condensate = $77.74 mil. (23.36%)
    • Natural Gas = $214.82 mil. (64.54%)
  • Debt to Revenue: 112.03%
  • Price to Book Value: 0.79
  • Operational Cash Flow (TTM): $143.79 million CAD

5. Ring Energy Inc. (REI)

Market Cap: $277.74 million USD

Price: $2.59 USD

YTD Change: +13.60%

CEO: Paul D. Mckinney

Ring Energy, Inc., (NYSE: REI) is an independent exploration and production company, engaging in the acquisition and development of high-quality oil and gas assets located in Texas and New Mexico.

The management team has over 35 years of experience in the field and they are focused on having a sound capital allocation strategy that develops free cash flow producing assets.

  • BOE per day: 8,518 BOE/d (2021)
  • Revenue by Products
    • Crude oil = $181.53 mil. (92.47%)
    • Natural Gas = $14.77 mil. (7.53%)
  • Debt to Revenue: 0.15%
  • Price to Book Value: 0.82
  • Operational Cash Flow (TTM): $81.48 million CAD

 

 

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We are not brokers, investment, or financial advisers; you should not rely on the information herein as investment advice. If you are seeking personalized investment advice, please contact a qualified and registered broker, investment adviser, or financial adviser. You should not make any investment decisions based on our communications. Our stock profiles are intended to highlight certain companies for YOUR further investigation; they are NOT recommendations. The securities issued by the companies we profile should be considered high risk and, if you do invest, you may lose your entire investment. Please do your own research before investing, including reading the companies’ public filings, press releases, and risk disclosures. The company provided information in this profile, extracted from public filings, company websites, and other publicly available sources. We believe the sources and information are accurate and reliable but we cannot guarantee it. The commentary and opinions in this article are our own, so please do your own research.
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  • Declan O’Flaherty

    Declan holds a Bachelor of Commerce from the University of Alberta and has over 2 years of experience investing in financial markets. As a value investor, Declan embraces the lessons of Warren Buffett and his disciples when making investing decisions. With an emphasis on business fundamentals, his strategy focuses on finding stocks with excellent management, a competitive advantage, and those that are selling at discount to their real value

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