7 top penny oil & gas stocks to buy under $2

Highlights

• Penny stocks are often considered pocket friendly for those who wish to but at a low price
• A Canadian penny energy stock returned nearly 526 per cent over the past year
• A sustainable energy stock posted an ROE of 200 per cent.

With the worldwide vaccination drive and business operations returning to a pre-pandemic level, industry experts believe oil and gas's demand and supply gap will be reduced. The well-known oil and gas companies are believed to have navigated the pandemic well, but there are also a few penny oil and gas stocks that investors would like to read about.

Some investors wish to buy stocks that are trading cheap or at a lower price band. Hence, we present seven such penny oil and gas stocks for the investors to read about.

1. PetroTal Corp (TSXV:TAL)

This oil and gas company explores and develops natural gas and crude oil in Peru, South America. PetroTal Corp also derives revenue from the sale of crude oil. It held a market cap of C$ 212.81 million.

The stock price closed at C$ 0.26 apiece on August 18, 2021, and was trading nearly 24 per cent below its 52-week high of C$ 0.34 (March 17, 2021). The price of PetroTal stocks grew by 100 per cent in the last nine months but increased by only 30 per cent over the past year.

PetroTal posted crude oil revenue of US$ 32.35 million in the first quarter of the fiscal year 2021, up from US$ 32.24 million in Q1 FY20. Its net income was US$ 30.97 million in the same quarter.

It commenced drilling the 7D well covering a depth of 2,696 meters extracting oil-producing sands. The production for the quarter averaged 7,331  barrels of oil equivalent per day (bopd), as per the management’s commentary. As per the 2020 sustainability report, it has reduced 15,043 metric tonnes of carbon emissions so far.

On the valuation front, the oil and gas scrip held earnings per share of 0.11 and a return on equity (ROE) of 45.23 per cent.

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2. ReGen III Corp. (TSXV:GIII)

The C$ 127 million market company is building sustainable green projects. ReGen III also uses its patented technology to produce a higher value product mix of base oil. This technology is used chiefly by refineries.

The stock price closed at C$ 1.15 on August 18, and on this day, it was trading nearly 539 per cent above its 52-week low of C$ 0.18 (September 29, 2020). The stock price returned a high of 219 per cent in the last nine months. However, it rocketed up by 423 per cent over the past year.

ReGen III Corp incurred a net loss of C$ 3.07 million in the March quarter of the fiscal year 2021, up from a loss of C$ 1.29 in the March quarter of FY20.

The senior leadership proposed a new facility in the U.S. Gulf Coast (USGC), expecting to process 78 million gallons of clean lubricating oil per year. This facility is also expected to reduce CO2 emissions.

The ROE of ReGen stood at 200 per cent.

Also Read: 5 best TSX oil & gas stocks to buy under $50

3. Saturn Oil & Gas Inc (TSXV:SOIL)

The Canadian energy company focuses on an advanced exploration of oil and gas properties in the west-central region of Saskatchewan, Canada. Its market cap stood at C$ 70 million and its outstanding shares at 502.91 million.

The stock of the oil scrip closed at C$ 0.14 on August 18 and was trading nearly 35 per cent below its 52-week high of C$ 0.21 (May 31, 2021). It returned 33 per cent over the past year.

Saturn Oil & Gas posted an oil revenue of C$ 1.32 million in Q1 FY21, down from C$ 3.16 million in Q1 FY20. Its net loss was C$ 1.2 million in the same quarter.

The management believes that the uncertainty associated with the pandemic may affect the ability of the company to raise funds.

As per the valuation metrics, the price-to-book (P/B) ratio was 34.38, and D/E stood at 14.79.

4. Hemisphere Energy Corporation (TSXV:HME)

Hemisphere Energy specializes in the procurement and development of conventional oil pools. It focuses on the sustainable growth of heavy oil assets. The energy corporation held a market cap of C$ 74 million (at the time of writing).

The stocks of Hemisphere ballooned by 740 per cent in the last nine months. Moreover, it increased 546 per cent over the past year. The stock price closed at C$ 0.84 on August 18 and was trading at roughly 18 per cent below its 52-week high of C$ 1.03 (June 28, 2021).

Hemisphere Energy posted a revenue of C$ 10.1 million in Q2 FY21, up 311 per cent Year-Over-Year (YOY). Its net loss was C$ 3.59 million in the same quarter.

The production of 1,786 boe/d was recorded in Q2 FY21, increasing by eight per cent quarter-on-quarter, and net debt was lowered by 40 per cent YOY.

The P/B ratio stood at 4, and the return on assets (ROA) was 0.24 per cent.

5. NG Energy International Corp. (TSXV:GASX)

The company with a market cap of C$ 113.79 million explores and develops oil and gas, deriving a major chunk of its revenue from the sale of oil and gases. The company held outstanding shares of 106.34 million.

The stock price closed at C$ 1.07 on August 18, was trading roughly 91 per cent above its 52-week low of C$ 0.56 (August 24, 2020) and traded 43 per cent below its 52-week high of C$ 1.88 (February 8, 2021).

The stock price climbed by 78 per cent over the past year, and on a year-to-date basis, it went up by only about nine per cent.

NG Energy International incurred a loss of US$ 1.29 million in the March quarter of the fiscal year 2021. The P/B ratio was 6.68, and the D/E ratio was 0.30.

Also Read: 4 oil & gas stocks to buy in 2021

6. Jericho Energy Ventures Inc (TSXV:JEV)

The company with a C$ 158.69 million market cap is a low carbon-producing energy company. Jericho has invested in hydrogen technology, new energy systems, and energy storage systems.

The stock price closed at C$ 0.72 on August 18, and was trading 620 per cent above its 52-week low of C$ 0.1 (August 20, 2020).

The stock's price skyrocketed by 526 per cent over the past year, and on a year-to-date basis, it went up by 220 per cent.

Jericho Energy Ventures posted a net crude oil revenue of C$ 0.02 million in the March quarter of the fiscal year 2021. Its net loss was C$ 2.07 million in the same quarter.

As per the latest report, the energy firm has participated in the U.S. Department of Energy Hydrogen Earthshort program. This program aims to achieve a zero-emission breakthrough for Hydrogen Boiler technology meant for industrial and commercial applications.

The P/B ratio stood at 7.2 (at the time of writing).

7. Eco (Atlantic) Oil & Gas Ltd (TSXV:EOG)  

This oil and gas company identifies, acquires, and develops petroleum opportunities around the world. Some of its projects are based in Namibia and Guyana. Its market cap was C$ 101.8 million

The stock price closed at C$ 0.51 on August 18, and was trading roughly 16 per cent below its 52-week high of C$ 0.61 (July 2, 2021).

The stocks of Eco Oil increased by nearly 28 per cent in the last nine months but returned just over 21 per cent over the past year.

As per the latest report, Eco Oil received the TSV Venture Exchange approval to raise approximately C$ 6.1 million through a private placement.

Eco Oil & Gas incurred a net loss of US$ 1.49 million in the March quarter of the fiscal year 2021. On the valuation front, the P/B ratio stood at 5.1, and the D/E ratio was 0.02.

Bottom line:

Penny stocks are commonly known to have an inherent risk of being illiquid as these stocks are thinly traded in the market. Investors should look at these risks before investing.