Three ASX penny stocks benefiting from crude oil rally

Highlights 

  • After falling to the US$17 level in March 2020, it is now trading above US$83 a barrel in October 2021.
  • A consistent rally in crude oil has directly benefited oil companies.
  • ADX, ATS, DOR are some ASX penny stocks in the energy space that have surged higher this month.

After the March 2020 meltdown, not only equity market rallied to all-time highs, but crude oil also rallied to a 7-year high. After falling to the US$17 level in March 2020, it is trading above US$83 a barrel in October 2021.

Oil and Gas processing unit

Image Source: © Pichitbo | Megapixl.com

The massive recovery in crude oil prices has helped oil exploration companies to expand their profit margins. A few ASX penny stocks in the energy space have also been doing well, especially in the month of October 2021. Let us have a look at three of these rallying stocks.

Read More: 5 ASX stocks to explore amid surging LNG prices

  1. ADX Energy Limited (ASX:ADX)

ADX Energy is an ASX-listed oil and exploration company, having projects in Romania, Austria and Italy. The company has a market capitalisation of AU$26.5 million. It is aiming to become a leading onshore European energy company.

                       

Which ASX penny stocks are benefiting from crude oil rally?

 

The ADX share price has risen 57.14% as of 14 October 2021, last closing at AU$0.11. At the beginning of this month, the company signed a Memorandum of Association (MOA) with Windkraft Simonsfeld AG to supply green electricity, which has received a positive response from the investors.

  1. Doriemus PLC (ASX:DOR)

Doriemus is an ASX-listed, UK-based oil exploration company, having three projects - Horse Hill, Isle of Wight and Greenland Oil and Gas. The company has a market capitalisation of AU$39.6 million and its share price last traded at AU$0.32 as on Thursday.

The DOR share price has delivered a positive return of 23.07% this month so far. In 1H FY21, the company registered a net loss of AU$324,000, compared to AU$568,000 a year ago. The basic eps has also increased from negative 99 cents per share to negative 54 cents per share.

  1. Australis Oil & Gas Limited (ASX:ATS)

Australis Oil & Gas is the third stock on the list that has been going strong amid red-hot crude oil prices. The company’s share price soared 25% this month, last closing at AU$0.065 on Thursday.

The company secured a revenue of US$13.2 million (before royalties and hedging) in 1H FY21, while the average realised sales price had gone up to US$63 per barrel.

Read More: Boss Energy (ASX:BOE) remained in news today. Here’s why

Bottom Line

Oil producers are a direct beneficiary of rising crude oil prices, which are now trading at a 7-year high, supporting Australian oil companies as well. As economies start to re-open, more demand for crude oil could catapult these prices to the near-US$90-mark, which would again help energy companies to expand their profit margins.

 However, an investor should always do proper due diligence before putting their hard-earned money on the line.

Read More: Why Origin Energy (ASX:ORG) shares gained 18% in last three weeks

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