Oil and gas prices are soaring amid reckless inflation. According to Goldman Sachs, Brent crude oil prices will average $140/ barrel between July and September. Moreover, AAA predicts that the national average for regular gasoline will hit $4.92/ gallon.

On the other hand, the International Energy Agency recently said that world oil demand will rise more than 2% to a record high of 101.60 million barrels/ day in 2023.

“Although we expect the current upward pressure on energy prices to lessen, high energy prices will likely remain prevalent in the United States this year and next,” EIA Administrator Joe DeCarolis said.

Given the favorable prospects of the industry, we think fundamentally solid oil and gas stocks Adams Resources & Energy, Inc. (AE), APA Corporation (APA), Birchcliff Energy Ltd. (BIREF), PrimeEnergy Resources Corporation (PNRG), and Whitecap Resources Inc. (SPGYF) are well poised to perform well in the coming months.

These stocks are rated Strong Buy in our proprietary POWR Ratings system and have an A grade for Momentum.

Adams Resources & Energy, Inc. (AE)

AE and its subsidiaries engage in the marketing, transportation, terminalling, and storage of various crude oil and natural gas basins in the United States.

It operates in three segments: Crude Oil Marketing, Transportation and Storage; Tank truck Transportation of Liquid Chemicals, Pressurized Gases, Asphalt, and Dry Bulk; and Pipeline Transportation, Terminalling and Storage of Crude Oil.

On May 16, 2022, Kevin J. Roycraft, AE’s CEO, said, “All three of our segments made important progress on the execution of targeted initiatives designed to profitably sustain and grow their respective businesses for the long-term benefit of our shareholders.”

For the first quarter ended March 31, 2022, AE’s total revenues increased 137.9% year-over-year to $774.25 million. Its net earnings came in at $6.09 million, up 116.9% year-over-year, while its EPS came in at $1.39, up 110.6% year-over-year.

Analysts expect AE’s revenue to be $3.07 billion in 2022, representing a 51.6% year-over-year increase. The company’s EPS is expected to increase 28.7% year-over-year to $3.54 in 2022. Over the past year, the stock has gained 19.9% to close the last trading session at $32.49. Its 50-day moving average of $35.91 is above its 200-day moving average of $32.41.

AE’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which indicates a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

AE has an A grade for Value and Momentum and a B for Sentiment and Quality. It is ranked #2 out of 99 stocks in the B-rated Energy – Oil & Gas industry. Click here for the additional POWR Ratings for Growth and Stability for AE.

APA Corporation (APA)

APA and its subsidiaries explore for, develop, and produce oil and gas properties. It has operations in the United States, Egypt, and the United Kingdom and exploration activities offshore Suriname. 

On June 21, 2022, APA released positive flow test results from the Krabdagu exploration well on Block 58 offshore Suriname, expected to accelerate the company’s business operations further.

APA’s natural gas liquids revenues for its first quarter ended March 31, 2022, came in at $223 million, up 74.2% year-over-year, while its total revenues came in at $2.67 billion, up 42.7% year-over-year. The company’s net income came in at $1.88 billion, up 385.3% year-over-year. In addition, its EPS came in at $5.43, up 432.4% year-over-year.

For fiscal 2022, analysts expect APA’s revenue to increase 30.1% year-over-year to $10.32 billion. Its EPS is estimated to grow 155.1% year-over-year to $9.95 in 2022. Over the past year, APA has gained 68.8% to close the last trading session at $37.47. Its 50-day moving average of $42.94 is above its 200-day moving average of $33.48.

APA’s overall A rating equates to a Strong Buy in our proprietary rating system. It has an A grade for Momentum and Quality and a B grade for Value. 

Within the Energy – Oil & Gas industry, it is ranked #5. Click here for the additional POWR Ratings for Growth, Stability, and Sentiment for APA.

Birchcliff Energy Ltd. (BIREF)

Headquartered in Calgary, Canada, BIREF, an intermediate oil, and natural gas company, acquires, explores for, develops, and produces natural gas, light oil, condensate, and natural gas liquids in Western Canada. 

On May 11, 2022, Jeff Tonken, BIREF’s CEO, said, “We have increased our full-year 2022 targets for adjusted funds flow to $1.18 billion, and free funds flow to $920 million to $940 million and updated our five-year plan for 2022 to 2026. We expect to reach zero total debt in Q4 2022 and have a surplus of $260 million to $280 million at year-end 2022.”

BIREF’s natural gas sales came in at $177.61 million for its first quarter ended March 31, 2022, up 62.3% year-over-year. Its cash flow from operating activities came in at $154.15 million, up 86.6% year-over-year. Moreover, its adjusted fund’s flow came in at $183.70 million, up 109.2% year-over-year.

BIREF’s revenue is expected to increase 45.9% year-over-year to $1.07 billion in 2022. Over the past year, the stock has gained 77% to close the last trading session at $6.99. Its 50-day moving average of $8.09 is above its 200-day moving average of $6.12.

BIREF has an overall A rating, which indicates a Strong Buy in our proprietary rating system. It has an A grade for Momentum and a B grade for Growth and Quality. 

Within the same industry, BIREF is ranked #3. Click here to check additional ratings for Value, Stability, and Sentiment for BIREF.

PrimeEnergy Resources Corporation (PNRG)

Independent oil and natural gas company PNRG and its subsidiaries acquire, develop, and produce oil and natural gas properties in the United States. It also acquires oil and gas properties through joint ventures with industry partners; and provides contract services to third parties.

PNRG’s revenues for its first quarter ended March 31, 2022, came in at $26.21 million, up 101.6% year-over-year. Its net income came in at $11.14 million, compared to a net loss of $1.46 million in the previous period. Also, its EPS came in at $4.07, compared to a loss per share of $0.73.

Over the past year, the stock has gained 65.6% to close the last trading session at $75.99. Its 50-day moving average of $81.64 is above its 200-day moving average of $72.10.

PNRG’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which indicates a Strong Buy in our proprietary rating system.

It has an A grade for Momentum and a B grade for Growth, Sentiment, and Quality. It is ranked first in the same industry. Click here for the additional POWR Ratings for Value and Stability for PNRG.

Whitecap Resources Inc. (SPGYF)

Headquartered in Calgary, Canada, oil company SPGYF acquires and develops petroleum and natural gas properties in Canada. Its principal properties are located in West Central Alberta, British Columbia, Southeast Saskatchewan, West Central Saskatchewan, and Southwest Saskatchewan.

For the first quarter ended March 31, 2022, SPGYF’s petroleum and natural gas revenues came in at $1 billion, up 123.6% year-over-year. Its net income came in at $652.33 million, up 3,222.3% year-over-year, while its EPS came in at $1.03, up 2,475% year-over-year.

SPGYF’s revenue is expected to increase 60.8% year-over-year to $3.17 billion in 2022. Over the past year, the stock has gained 37.6% to close the last trading session at $7.14. Its 50-day moving average of $8.31 is above its 200-day moving average of $6.93.

SPGYF’s overall A rating represents a Strong Buy in our POWR Ratings system. The stock has an A grade for Momentum and a B grade for Growth, Value, and Quality. 

SPGYF is ranked #4 in the Energy – Oil & Gas industry. Click here for the additional POWR Ratings for Stability and Sentiment for SPGYF.

AE shares were trading at $31.99 per share on Tuesday afternoon, down $0.50 (-1.54%). Year-to-date, AE has gained 16.61%, versus a -19.24% rise in the benchmark S&P 500 index during the same period.

About the Author: Riddhima Chakraborty

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...

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