In this piece, we will take a look at ten best oil and gas stocks to buy.
The global oil and gas industry is witnessing a surge in investments, reflecting its resilience amidst an evolving energy landscape. Despite growing attention toward renewable energy sources, the demand for oil and gas remains robust, driven by the ever-increasing needs of both developed and developing economies. As the world’s appetite for energy intensifies, so does the necessity for sustained capital investment in the oil and gas sector.
According to the Upstream Oil and Gas Investment Outlook, a report by the International Energy Forum and S&P Global Commodity Insights, annual upstream investments must increase by $135 billion to reach $738 billion by 2030 to ensure a stable supply. This figure represents a 15% rise compared to estimates from a year ago and is 41% higher than projections made two years ago. This escalation is attributed to rising production costs and an improved demand outlook. The report indicates that a cumulative $4.3 trillion will be needed for upstream investments between 2025 and 2030, even as demand growth plateaus.
The rise in upstream capital expenditures, which grew by $63 billion year-on-year in 2023 and is expected to increase by another $26 billion in 2024, has placed the annual investment level above $600 billion for the first time in a decade. Notably, North America is expected to be a significant contributor to this growth, accounting for a third of the spending in 2024. However, Latin America is emerging as a vital player in the global supply chain, poised to become the largest source of incremental capital expenditure growth in 2024, surpassing North America for the first time in two decades. The region’s prominence is set to continue through 2030, particularly in conventional crude projects, with substantial expansions planned in Brazil and Guyana. These developments underscore the ongoing importance of the Americas in the global oil and gas supply chain.
The industry’s improved investment landscape is also driven by factors such as resilient production in regions like Russia, Iran, and Venezuela, despite geopolitical challenges. Additionally, non-OPEC supply has exceeded expectations, and spare production capacity has been restored. Nevertheless, the risk of underinvestment and potential supply shortages could resurface if commodity prices, geopolitical dynamics, or environmental regulations shift significantly.
Meanwhile, OPEC remains a crucial player in maintaining market stability. In an address to the International Chamber of Commerce in Vienna, Dr. Hasan M. Qabazard, Director of the Research Division at OPEC, emphasized the organization’s commitment to ensuring energy security and meeting future demand. He highlighted that while energy prices have been volatile, the global economy has shown resilience, and market stability remains a top priority. OPEC’s strategy aims to balance the supply and demand dynamics, ensuring that oil continues to play a vital role in the energy mix for decades to come.
The current environment presents a promising opportunity for investors looking to capitalize on the resurgence of the oil and gas sector, particularly in the penny stock category. While penny stocks are often associated with higher risk due to their low price and smaller market capitalization, they also offer substantial upside potential. Many companies in this category are well-positioned to benefit from the increasing capital inflow into the industry, making them attractive options for investors seeking exposure to the oil and gas markets at a relatively low entry point.
With that, let’s explore the ten best oil and gas penny stocks to buy.
Aerial view of a refinery tower surrounded by the sprawling landscape of pipelines in an oil & gas midstream facility.
Our Methodology
For this article, we used the Finviz screener and identified 20 stocks in the oil and gas sector having Buy or Buy-equivalent ratings from analysts and with share prices under $5, as of September 27. Next, we examined Insider Monkey’s data on 912 hedge funds as of Q2 2024. We narrowed down our list to 10 stocks most widely held by institutional investors and ranked them in ascending order of the number of hedge funds that have stakes in them as of Q2 of 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10. Imperial Petroleum Inc. (NASDAQ:IMPP)
Number of Hedge Fund Holders: 6
Share Price: $4
Imperial Petroleum Inc. (NASDAQ:IMPP) provides international seaborne transportation services to oil producers, refineries, and commodities traders. The company’s fleet transports refined petroleum products like gasoline, diesel, and jet fuel, along with edible oils, chemicals, crude oil, iron ore, coal, and grains. Headquartered in Athens, Greece, Imperial Petroleum Inc. (NASDAQ:IMPP) has a diversified fleet that includes medium-range refined petroleum product tankers, Aframax and Suezmax tankers, and handysize drybulk carriers.
The company had a strong financial performance in Q2 2024, reporting a net profit of $19.5 million—its second-best quarterly performance ever. This achievement was driven by the solid utilization of its fleet, especially product tankers operating in the tight West of Suez market. Revenues came in at $47 million, slightly lower compared to the same period last year, due to a decrease in fleet size and lower Suezmax rates. Despite this, Imperial Petroleum Inc. (NASDAQ:IMPP) managed to offset these challenges with a strategic focus on spot activity and favorable tanker rates.
From a balance sheet perspective, the company is in a robust position, with a debt-free balance sheet and a strong cash base of approximately $190 million as of June 2024. This liquidity offers flexibility for fleet expansion and navigating market fluctuations. Imperial Petroleum Inc. (NASDAQ:IMPP) profitability has been on an upward trajectory over the last three quarters, showcasing its ability to generate consistent returns even amid seasonal headwinds.
Hedge fund sentiment around Imperial Petroleum Inc. (NASDAQ:IMPP) has also improved, with six hedge funds holding stakes in the company as of Q2 2024, up from four in the previous quarter. This increased interest reflects confidence in the company’s strategic positioning and financial health.
With a net asset value of around $430 million and a market capitalization significantly lower, Imperial Petroleum Inc. (NASDAQ:IMPP) appears to be trading at a discount. The company’s continued focus on strategic acquisitions, efficient fleet utilization, and maintaining a strong financial structure positions it well for future growth and potential value realization for shareholders.
09. Ring Energy, Inc. (NYSE:REI)
Number of Hedge Fund Holders: 11
Share Price: $1.60
Ring Energy, Inc. (NYSE:REI) is an independent oil and natural gas company headquartered in The Woodlands, Texas. The company specializes in the acquisition, exploration, development, and production of oil and natural gas properties. Ring Energy, Inc. (NYSE:REI) operates across a substantial land base, holding interests in 56,711 net developed acres and 2,668 net undeveloped acres in Texas counties, including Andrews, Gaines, and Ward, along with additional properties in Lea County, New Mexico. This strategic positioning in the prolific Permian Basin enables the company to tap into one of the most productive oil regions in the U.S., responsible for nearly half of the country’s daily production.
In Q2 2024, Ring Energy, Inc. (NYSE:REI) reported impressive financial metrics, with a net income of $22.4 million, translating to $0.11 per diluted share, while adjusted net income was $23.4 million, or $0.12 per diluted share. The company achieved total sales volumes of 19,786 barrels of oil equivalent per day (BOEPD), marking a 4% increase from the previous quarter and exceeding guidance. This growth was primarily fueled by oil production, which averaged 13,623 barrels per day, a 2% rise from Q1, and surpassing expectations.
The company’s operational efficiency is underscored by its generation of $37 million in adjusted free cash flow during the first half of 2024, reflecting a remarkable 60% increase compared to the previous year. This growth can be attributed to the strategic acquisition of Founders, completed in August 2023, which has further strengthened Ring Energy, Inc. (NYSE:REI) market position. Additionally, the company successfully drilled and completed 11 wells in Q2, aligning with its operational targets.
With 11 hedge fund holders as of Q2 2024, up from 9 in the previous quarter, market confidence in Ring Energy, Inc. (NYSE:REI) is evident. The U.S. Energy Information Administration forecasts a nearly 8% increase in crude oil output in the Permian Basin for 2024, aligning with Ring Energy, Inc. (NYSE:REI) focus on high-value formations. As the company continues to enhance production and capitalize on market opportunities, it stands out as a compelling investment within the oil and gas penny stock sector.
08. Baytex Energy Corp. (NYSE:BTE)
Number of Hedge Fund Holders: 17
Share Price: $2.94
Baytex Energy Corp. (NYSE:BTE) is a Canadian energy company engaged in acquiring, developing, and producing crude oil and natural gas in the Western Canadian Sedimentary Basin and the Eagle Ford in the United States. Established in 1993, Baytex Energy Corp. (NYSE:BTE) offers a diverse portfolio that includes light oil, heavy oil, natural gas, and natural gas liquids. The company’s primary assets are located in Alberta, Saskatchewan, and Texas, where it holds a significant interest in the Eagle Ford property.
In the second quarter of 2024, Baytex Energy Corp. (NYSE:BTE) delivered robust financial results, demonstrating disciplined capital management and strong production growth. The company reported a 23% year-over-year increase in production per share, with average production reaching 154,000 barrels of oil equivalent (BOE) per day, 85% of which was oil and natural gas liquids. This increase was supported by higher production from the company’s key assets, including a 4% quarter-over-quarter rise in crude oil production, averaging over 110,000 barrels per day.
Baytex Energy Corp. (NYSE:BTE) financial performance has been equally impressive. The company generated CAD533 million in adjusted funds flow, representing CAD0.65 per share, a 38% increase compared to the same period in 2023. Net income for the quarter stood at CAD104 million, translating to CAD0.13 per share. Additionally, Baytex generated CAD181 million in free cash flow during Q2, allowing the company to return CAD97 million to shareholders through share buybacks and a quarterly dividend. This commitment to shareholder returns is further evident in the company’s ongoing normal course issuer bid, which has repurchased 7.2% of its outstanding shares since June 2023.
Baytex Energy Corp. (NYSE:BTE) is also focused on maintaining a strong balance sheet, with a total debt-to-EBITDA ratio of 1.1x. As of Q2 2024, the company’s total debt was CAD2.5 billion, largely unchanged from the previous quarter due to strategic acquisitions and credit facility extensions. Moving forward, Baytex expects to generate CAD700 million of free cash flow in 2024, weighted 75% towards the second half of the year, enabling further debt reduction and shareholder returns.
As of Q2 2024, Baytex Energy Corp. (NYSE:BTE) was held by 17 hedge funds, up from 14 in the previous quarter, indicating increased institutional confidence in the company’s financial performance and growth prospects.
07. W&T Offshore, Inc. (NYSE:WTI)
Number of Hedge Fund Holders: 19
Share Price: $2.07
W&T Offshore, Inc. (NYSE:WTI), headquartered in Houston, Texas, is an independent oil and natural gas producer focused on acquiring, exploring, and developing properties in the Gulf of Mexico. Established in 1983, the company is involved in the production and sale of crude oil, condensate, natural gas liquids, and natural gas. As of Q2 2024, W&T Offshore, Inc. (NYSE:WTI) was held by 19 hedge funds, down from 22 in the previous quarter, indicating a slight decrease in institutional interest.
During the second quarter of 2024, W&T Offshore, Inc. (NYSE:WTI) demonstrated strong operational and financial performance, with a solid focus on generating free cash flow and reducing debt. The company reported a production of 34,900 barrels of oil equivalent per day, consistent with its guidance and nearly unchanged from the previous quarter. This stable production level reflects the company’s efficient operational management and successful integration of assets acquired earlier in 2024.
W&T Offshore, Inc. (NYSE:WTI) generated an impressive $45.9 million in adjusted EBITDA during the quarter. Additionally, the company’s free cash flow of $18.7 million further strengthened its financial position, allowing it to increase cash and cash equivalents by 30% to $123 million and reduce net debt by 9% to $268.5 million. These achievements are a testament to W&T Offshore’s ability to optimize costs and realize synergies from recent acquisitions.
The company’s midyear 2024 SEC proved reserves increased by 15% to 141.9 million barrels of oil equivalent, while the pre-tax PV-10 value of these reserves rose by 28% to $1.4 billion, compared to $1.1 billion at year-end 2023. This growth was driven by positive performance revisions and the successful addition of 21.8 million barrels of oil equivalent through acquisitions, showcasing W&T Offshore, Inc. (NYSE:WTI) expertise in expanding its asset base.
Furthermore, the company continues to deliver shareholder value through its quarterly dividend payments and strong balance sheet. As W&T Offshore, Inc. (NYSE:WTI) advances its operational strategy and explores new opportunities in the Gulf of Mexico, it remains well-positioned for continued growth in 2024 and beyond, supported by a robust cash flow profile and disciplined capital allocation strategy.
06. NextDecade Corporation (NASDAQ:NEXT)
Number of Hedge Fund Holders: 21
Share Price: $4.80
NextDecade Corporation (NASDAQ:NEXT) is a Houston, Texas-based energy company specializing in the development and construction of liquefaction facilities for natural gas in the United States. The company’s flagship project is the Rio Grande LNG terminal located in the Port of Brownsville, Texas, which is being developed alongside a comprehensive carbon capture and storage (CCS) project. The company’s strategic focus on both LNG production and carbon emission reductions reflects a broader industry shift towards cleaner energy solutions.
NextDecade Corporation (NASDAQ:NEXT) has made significant strides in securing long-term partnerships, as evidenced by the recent signing of multiple agreements. In May 2024, the company inked a 20-year LNG Sale and Purchase Agreement (SPA) with ADNOC, which will purchase 1.9 million tons per annum (MTPA) of LNG from Train 4 at the Rio Grande facility. The deal, priced at Henry Hub index rates, is contingent on a positive Final Investment Decision (FID) for Train 4. Further enhancing its project pipeline, NextDecade signed a Heads of Agreement (HoA) with Aramco in June 2024 for an additional 1.2 MTPA of LNG over a similar 20-year period. The agreement is expected to be finalized into a binding SPA following a successful FID.
In terms of financial performance, the company is well-positioned, supported by robust capital arrangements. In early 2024, NextDecade Corporation (NASDAQ:NEXT) secured a $50 million senior secured revolving credit facility through its subsidiary NextDecade LLC, which will support Train 4 development at Rio Grande. Additionally, Rio Grande issued $1.115 billion in senior secured notes in June 2024 to refinance existing commitments, lowering overall costs and extending the amortization schedule. These notes, bearing a fixed interest rate of 6.58%, will mature in 2047.
As of Q2 2024, 21 hedge funds hold positions in NextDecade Corporation (NASDAQ:NEXT), up from 17 in the previous quarter, signaling increased institutional interest in the stock. With strategic partnerships, strengthened financial standing, and growing institutional support, NextDecade Corporation (NASDAQ:NEXT) is poised for long-term growth and remains an attractive investment in the energy sector’s transition to sustainable practices.
05. Oil States International, Inc. (NYSE:OIS)
Number of Hedge Fund Holders: 22
Share Price: $4.58
Oil States International, Inc. (NYSE:OIS) is a diversified provider of capital equipment and engineered products catering to the energy, industrial, and military sectors worldwide. The company operates through three primary segments: Well Site Services, Downhole Technologies, and Offshore/Manufactured Products. Each segment provides specialized offerings that support drilling, completion, and production activities in the oil and gas sector, along with other industries such as industrial and military.
The company recently announced its Q2 2024 earnings, showcasing strong performance across its segments. Oil States International, Inc. (NYSE:OIS) beat analyst expectations with an EPS of $0.07, surpassing the anticipated $0.035. This achievement was driven by increased demand for subsea and production systems, particularly in offshore basins. The company’s consolidated revenues increased by 11% sequentially, while adjusted EBITDA saw a robust growth of 38%, reflecting improved operational efficiencies and higher project completions.
The Offshore/Manufactured Products segment was a key contributor to these results, with a 17% sequential increase in revenues, totaling $102 million. Adjusted segment EBITDA rose by 27%, benefiting from a backlog of $300 million as of June 30, 2024, and a strong quarterly book-to-bill ratio of 1.0. The Well Site Services segment, despite a 2% sequential decline in revenues due to lower U.S. land activity, reported a 30% sequential increase in adjusted segment EBITDA, supported by the strategic optimization and exit of underperforming locations. Additionally, the Downhole Technologies segment reported a 16% increase in revenues and a 42% growth in adjusted segment EBITDA sequentially, driven by stronger international sales.
In Q2 2024, Oil States International, Inc. (NYSE:OIS) generated $10 million in cash flows from operations, reflecting a strong liquidity position. The company used these funds to repurchase convertible debt and buy back common stock, demonstrating a commitment to enhancing shareholder value. Its gross debt to EBITDA ratio stands at 1.5x, and net debt to EBITDA ratio is 1.2x, providing significant financial flexibility.
Hedge fund interest in the company decreased slightly, with 22 hedge funds holding stakes in Q2 2024, compared to 26 in the previous quarter. Overall, with stable oil prices, strong demand for its products, and strategic cost management, Oil States International, Inc. (NYSE:OIS) is well-positioned for future growth.
04. TETRA Technologies, Inc. (NYSE:TTI)
Number of Hedge Fund Holders: 22
Share Price: $2.90
TETRA Technologies, Inc. (NYSE:TTI) is an energy services and solutions company that operates through two primary segments: Completion Fluids & Products and Water & Flowback Services. The Completion Fluids & Products division manufactures and markets clear brine fluids, additives, and associated products for use in well drilling and workover operations. It serves clients in the United States and international markets, including Latin America, Europe, Asia, the Middle East, and Africa. The Water & Flowback Services segment provides water management solutions for onshore oil and gas operators, including frac flowback, well testing, and other services.
In Q2 2024, TETRA Technologies, Inc. (NYSE:TTI) reported a solid performance, driven by robust growth across its business segments. Revenue increased by 14% sequentially, and the company’s adjusted EBITDA rose by 32%. The Completion Fluids & Products segment achieved an impressive adjusted EBITDA margin of 28.9%, while the Water & Flowback Services segment saw a notable improvement in margins, rebounding from 9.6% in Q1 to 15.2% in Q2. This sequential improvement of 560 basis points reflects the company’s focus on optimizing operations and cost efficiency. Despite lower U.S. onshore rig activity, which declined 16% year-over-year, TETRA Technologies, Inc. (NYSE:TTI) revenue was only down 2%, indicating its resilience in a challenging market environment.
One of the key drivers of TETRA Technologies, Inc. (NYSE:TTI) future growth is its CS Neptune project in the Gulf of Mexico. The company secured a three-well deepwater fluids project for a major oil and gas operator, marking a significant milestone. This project is expected to generate material revenue starting in Q4 2024 and throughout 2025. Furthermore, TETRA is actively pursuing strategic initiatives in water desalination and beneficial reuse, positioning itself as a leader in environmental solutions for the oil and gas industry.
Hedge fund interest in TETRA Technologies, Inc. (NYSE:TTI) remains stable, with 22 hedge funds holding the stock as of Q2 2024, compared to 23 in the previous quarter. This demonstrates consistent institutional confidence in the company’s long-term potential. Overall, TETRA Technologies, Inc. (NYSE:TTI) focus on high-margin projects, strategic expansions in emerging markets, and strong fundamentals make it a compelling investment in the oil and gas sector.
03. Clean Energy Fuels Corp. (NASDAQ:CLNE)
Number of Hedge Fund Holders: 24
Share Price: $3.10
Clean Energy Fuels Corp. (NASDAQ:CLNE) is a leading provider of natural gas as alternative fuels for vehicle fleets and offers comprehensive fueling solutions across the United States and Canada. The company supplies renewable natural gas (RNG), compressed natural gas (CNG), and liquefied natural gas (LNG) for medium and heavy-duty vehicles and provides operation and maintenance services for public and private vehicle fleet customer stations. Additionally, Clean Energy Fuels Corp. (NASDAQ:CLNE) designs and builds vehicle fueling stations, and it also sells compressors and other equipment related to RNG production. The company serves various sectors such as heavy-duty trucking, airports, public transit, and industrial energy users.
As of Q2 2024, Clean Energy Fuels Corp. (NASDAQ:CLNE) has seen a rise in hedge fund interest, with the number of hedge fund holders increasing to 24, up from 20 in the previous quarter, indicating increased institutional confidence in the company.
During the second quarter of 2024, Clean Energy reported strong financial results, with a year-over-year growth in revenue to $98 million from $90 million in Q2 2023. The company achieved an adjusted EBITDA of $18.9 million, a significant improvement from $12 million during the same period last year. Clean Energy Fuels Corp. (NASDAQ:CLNE) sales of RNG, which stood at 57 million gallons in Q2, demonstrate the company’s growing footprint in the renewable fuels sector. The firm’s cash and investments at the end of the quarter totaled nearly $250 million, highlighting its robust liquidity position.
One of the key achievements in Q2 was the expansion of the Boron facility, California’s only natural gas liquefaction plant, which boosted its capacity by 50%. This strategic move is expected to cater to the increasing LNG demand, particularly from the commercial maritime industry. Moreover, Clean Energy Fuels Corp. (NASDAQ:CLNE) partnership with Amazon to build 19 publicly accessible fueling stations has attracted other fleets, contributing to higher recurring revenue at improved margins.
The company also continues to strengthen its infrastructure across North America, with more than 600 fueling stations. A recent partnership with Tourmaline, Canada’s largest independent gas producer, aims to establish a network of RNG fueling stations in Western Canada. With the industry embracing RNG and new technologies like Cummins X15N engine, Clean Energy Fuels Corp. (NASDAQ:CLNE) is well-positioned to capitalize on the growing trend toward decarbonizing heavy-duty transportation, making it a compelling pick in the oil and gas penny stock segment.
02. Kosmos Energy Ltd. (NYSE:KOS)
Number of Hedge Fund Holders: 25
Share Price: $3.96
Kosmos Energy Ltd. (NYSE:KOS), founded in 2003 and headquartered in Dallas, Texas, is an oil and gas exploration and production company with key assets located offshore in Ghana, Equatorial Guinea, and the U.S. Gulf of Mexico. The company also has significant gas projects in offshore Mauritania and Senegal. Kosmos Energy Ltd. (NYSE:KOS) has built a diverse portfolio along the Atlantic Margins, focusing on high-quality assets and an extensive exploration program.
Kosmos Energy Ltd. (NYSE:KOS) recently reported its Q2 2024 earnings, missing analysts’ expectations. The reported EPS of $0.1245 was below the expected $0.16. Despite this, Kosmos has demonstrated strong operational momentum across its business units. The company is on track to achieve its year-end production goal of 90,000 barrels of oil equivalent per day (BOEPD), primarily driven by the successful startups of the Jubilee Southeast project in Ghana and the Winterfell project in the Gulf of Mexico. The number of hedge funds holding Kosmos Energy Ltd. was 25 in Q2 2024, compared to 26 in the previous quarter, indicating a stable investor interest in the stock.
During the quarter, Kosmos Energy Ltd. (NYSE:KOS) production increased by 7% year-on-year, reaching 62,000 BOEPD. Although production was at the lower end of the guidance range, the company expects further ramp-up from the GTA project in Mauritania and Senegal, which is expected to deliver meaningful growth. The management highlighted that with the completion of key projects, capital expenditures are anticipated to decrease significantly, leading to a robust free cash flow of $100 million to $150 million per quarter. This strong cash flow will initially be directed towards reducing debt, enhancing Kosmos’ financial flexibility.
The company’s efforts to optimize costs were evident as operating costs for producing assets came in below guidance. As Kosmos brings its projects online, it is expected to generate substantial returns due to low finding and development (F&D) costs, ensuring attractive project economics. With an improved balance sheet and a focus on disciplined capital allocation, Kosmos Energy Ltd. (NYSE:KOS) is well-positioned for future growth. Investors seeking exposure to the oil and gas sector, particularly in high-quality offshore assets, may find Kosmos Energy Ltd. (NYSE:KOS) an attractive addition to their portfolios among oil and gas penny stocks.
01. Transocean Ltd. (NYSE:RIG)
Number of Hedge Fund Holders: 42
Share Price: $4.31
Transocean Ltd. (NYSE:RIG) is a leading provider of offshore contract drilling services, specializing in ultra-deepwater and harsh environment floaters. Founded in 1926 and based in Steinhausen, Switzerland, the company operates a modern fleet of mobile offshore drilling units, serving a range of clients, including integrated energy companies, government-controlled entities, and independent operators. As of the second quarter of 2024, Transocean Ltd. (NYSE:RIG) had 42 hedge fund holders, a slight decline from 46 in the previous quarter, reflecting a consistent level of institutional interest.
In Q2 2024, Transocean Ltd. (NYSE:RIG) reported robust financial results with contract drilling revenues reaching $861 million, a significant achievement supported by efficient operations and solid customer demand. The company’s adjusted EBITDA stood at $284 million, translating to an impressive EBITDA margin of 33%. Transocean Ltd. (NYSE:RIG) maintained high operational performance, achieving a revenue efficiency of 97% during the quarter, which highlights its ability to deliver strong results despite challenges in the global offshore drilling market.
A notable development for the quarter was the signing of several high-value contracts, particularly in the U.S. Gulf of Mexico, a region expected to play a pivotal role in the company’s growth. For example, Beacon Offshore Energy awarded Transocean’s Deepwater Atlas a two-well contract at an industry-leading rate of $580,000 per day. Similarly, BP awarded a 3-year contract to the Deepwater Invictus at $485,000 per day, further solidifying Transocean’s presence in the region. These contracts are expected to contribute significantly to cash flow and help the company in its deleveraging efforts.
Transocean Ltd. (NYSE:RIG) is also making strategic moves in other key markets, such as Brazil and Norway, with contracts that extend the firm duration of its rigs through 2025 and beyond. The company’s strong backlog and contract awards have positioned it well to capitalize on the anticipated growth in global offshore drilling, with projections from Rystad Energy indicating that offshore exploration investments could more than double by 2027. Overall, Transocean Ltd. (NYSE:RIG) solid financial performance, coupled with increasing day rates and strategic contract wins, underscores its potential as a strong player in the oil and gas industry, making it an attractive investment among penny stocks in the sector.
While we acknowledge the potential of RIG to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than RIG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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