USWS - 3 Energy Penny Stocks to Watch as Brent Crude Tops $84 Per Barrel
Best Penny Stocks to Watch as Energy Prices Skyrocket
Right now, energy penny stocks and blue chips are heating up. This is evidenced by the price of oil jumping above $83 via Brent Crude, which was up by around 1.7% at midday. At one point in the trading session, Brent Crude had hit a high of $84.60, which is its highest level since October of 2018. As a result of this, the energy industry is heating up, and there are plenty of penny stocks that investors are watching right now.
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While this is all good news, we do have to take a look at the underlying reasons behind the recent spike. The most pressing answer to this is the expedited economic recovery as a result of Covid. When the pandemic began, the energy industry and corresponding penny stocks were crushed by the lack of travel and halting of most transport industries.
However, in October 2021, high rates of vaccination mean that individuals are returning to work, school, and their previous travel plans. As a result, we’ve seen a massive spike in demand for oil and gas as well as the energy used in industrial processes. With this heightened demand, we also saw a shortage in the energy industry leading to a major spike in price.
Considering all of this, we see that the current situation we’re in makes sense. And as a result, many investors are flocking to energy penny stocks to take advantage. So, with all of this in mind, let’s take a look at three energy penny stocks to watch right now.
3 Energy Penny Stocks to Watch as Oil Prices Spike
- Kosmos Energy Ltd. ( NYSE: KOS )
- U.S. Well Services Inc. ( NASDAQ: USWS )
- Transocean Ltd. ( NYSE: RIG )
Kosmos Energy Ltd. (NYSE: KOS)
Kosmos Energy Ltd. is a penny stock that has climbed by over 30% in the past month and over 190% in the past twelve months. This is a sizable gain that reflects both Kosmos Energy and the overall energy industry during that time. If you’re unfamiliar, Kosmos is an oil and gas company that focuses on exploration and production. Kosmos primarily looks for these resources along the Atlantic Margins in offshore Ghana, Equatorial Guinea, and the U.S. Gulf of Mexico among others.
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Back in August, Kosmos Energy Ltd. reported its second-quarter results for 2021. The company reported a slight net over-lift position in sales of 66,200 barrels of oil equivalent per day compared to net production of 51,600 barrels of oil equivalent per day. Kosmos also reported revenues of $384 million or $63.80 per barrel of oil during this quarter.
“Kosmos delivered strong free cash flow in the second quarter. Through further debt reduction and EBITDAX growth, we expect leverage to continue to reduce through year-end 2021 and into 2022. With strong cash generation, the successful RBL extension, and the recently completed GTA FPSO transaction, Kosmos’ financial position has materially improved and we remain well-positioned to execute our remaining financing plans later this year.”
CEO and Chairman of Kosmos, Andrew G. Inglis
In the past few trading sessions, KOS stock’s volume has been much higher than its market average. With this in mind, will KOS be on your penny stock watchlist ?
U.S. Well Services Inc. (NASDAQ: USWS)
One of the bigger gainers of the day in the energy industry on October 11th is U.S. Well Services Inc. By midday, shares of USWS stock had shot up by a solid 17% to over $2.80 per share. This brings its YTD gain to a very solid 105%, which again, reflects the industry at large during that period. A few weeks ago, the company announced a business update as well as a reverse stock split. The stock split contains 1 post-split share for every 3.5 pre-split shares, which should help its balance sheet in the near future.
“Our vision is to be recognized as the market leader for low-cost, low-emission, completion services and a proven adherent to environmental, social, and governance best practices. In pursuit of this goal, U.S. Well Services is committed to executing our plan to deliver our balancer sheet and becoming the largest, and only pure-play, publicly-traded, provider of electric completion services.”
The President and CEO of U.S. Well Services, Joel Broussard
For some context, U.S. Well Services provides hydraulic fracturing services which includes electric fracture stimulation. This can be used for natural gas, and field gas production and dramatically reduces cost and emissions. Considering the growth prospects that USWS could have in the current energy industry, it seems like it could be worth keeping an eye on. For these reasons, will USWS stock be on your watchlist moving forward?
Transocean Ltd. (NYSE: RIG)
Up by almost 5% at midday are shares of RIG stock. This brings its six-month gain to over 30%, its YTD gain to over 75%, and its one-year gain to a very large 386%. For those unfamiliar, Transocean is a provider of offshore contract drilling services.
It offers services for deepwater and harsh environment oil production needs, and has the highest spec offshore drilling fleet in the world. With a fleet of 37 of these units, Transocean has a very large exposure to demand changes in the energy industry. Back in late August, the company announced that BOE Exploration & Production LLC awarded it a $252 million firm contract for its drillship, the Deepwater Atlas.
“This is a significant milestone for Transocean, BOE, and the Shenandoah partners, as we jointly venture into this new frontier of ultra-deepwater drilling. We are extremely pleased to have secured the maiden contract for the Deepwater Atlas; the first of our two 8th generation ultra-deepwater drillships that will enter the market in 2022.”
Jeremy Thigpen, CEO of Transocean
With this revenue, Transocean should be able to continue growing other parts of its business as well. And with its major gain throughout the past year or so, it looks like RIG stock could be worth keeping an eye on. Considering this, does it deserve a spot on your list of penny stocks to watch?
Which Energy Penny Stocks Are You Buying?
There’s no doubt that the energy industry is heating up right now. And as a result, many investors are focused on energy penny stocks that could benefit. While no one knows just how long this shortage will last, we also have to consider that this is just the beginning of the economic recovery from Covid.
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For this reason, it’s important to keep a close eye on the trajectory of Covid cases, as it has a direct impact on fuel consumption. But, with all of these exciting prospects in mind, which energy penny stocks are you buying right now?