In this article, we will explore the 10 high-growth energy stocks to invest in.
Investments in the Energy Sector Expected to Rise Amid Growing Demand?
The global energy industry is undergoing significant transformation, driven by the urgent need to address climate change and the increasing demand for cleaner energy sources. This sector is crucial not only for powering economies but also for ensuring energy security and sustainability. According to Infosys Limited, global investments in power generation are projected to reach approximately $3 trillion in 2024, with $2 trillion of that allocated to clean energy initiatives. This shift reflects a broader trend towards renewable sources such as solar and wind, which are becoming more competitive with traditional fossil fuels.
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Despite the push for clean energy, the oil and gas sector remains vital for energy security and economic stability. Companies are focusing on optimizing their portfolios and improving operational efficiencies. On December 16, Reuters reported oil and gas companies in Norway expect to make a record investment of NOK 275 billion ($24.68 billion) in 2025, according to a recent report by the Offshore Norge industry association. This marks an increase from NOK 263.7 billion this year and surpasses earlier forecasts. A year ago, the association had estimated investments for 2024 and 2025 would total NOK 240 billion and NOK 225.9 billion, respectively. The rise in investment is attributed to factors such as inflation, faster development timelines, and expanded project scopes, including additional drilling at existing sites.
In 2025, companies plan to drill 45 exploration wells in Norwegian waters, up from 41 this year, marking the highest level of activity since 2019. Norway is the largest oil and gas producer in Western Europe, with production exceeding 4 million barrels of oil equivalent per day. The outlook for investments indicates a gradual decline after 2025, with projections of NOK 251 billion in 2026 and NOK 203 billion by 2029 as current projects reach completion. This forecast is based on insights from 14 major companies that account for nearly all of Norway’s oil and gas output.
According to the Global Energy Perspective 2024 report by McKinsey & Company, global energy demand is projected to increase by 11% to 18% by 2050, mainly driven by emerging economies. These regions are experiencing population growth and a rising middle class, which leads to higher energy needs. Additionally, as manufacturing industries move from developed to developing countries, the demand for energy in these areas is expected to rise further.
Despite advancements in renewable energy sources, the transition to cleaner energy has been slower than anticipated. Key technologies are still not fully developed or cost-effective, meaning that renewables alone may not meet future energy demands. As a result, fossil fuels, including oil, natural gas, and coal, are projected to meet between 40% to 60% of global energy demand by 2050, down from 78% in 2023. Investment in fossil fuels is expected to persist for at least the next decade to keep pace with growing energy needs.
The future of the energy sector may depend on how effectively energy companies can adapt to changing market dynamics and invest in innovative technologies while meeting the growing demand for energy. With this background in mind, let’s take a look at the 10 high-growth energy stocks to invest in.
A drilling rig fueled by the energy and expertise of the oil & gas exploration and production company.
Methodology
To compile our list of the 10 high-growth energy stocks to invest in, we used stock screeners from Finviz and Yahoo Finance. We sorted our results based on market capitalization and picked the largest energy companies by market cap. We also consulted various online resources and reviewed our own rankings. This exercise provided us with a list of more than 60 energy stocks.
To narrow down our list to high-growth energy stocks, we focused on companies with a compound annual growth rate (CAGR) in net revenue exceeding 20% over the past 5 years. Finally, from this list of high-growth stocks that met our criteria, we focused on the top 10 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q3 2024 database of 900 elite hedge funds. The 10 high-growth energy stocks to invest in are ranked in ascending order based on the number of hedge funds holding stakes in them as of Q3 2024.
Why do we care about what hedge funds do? 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 High Growth Energy Stocks To Invest In
10. Vista Energy SAB de CV (NYSE:VIST)
5-Year Revenue CAGR: 28.52%
Number of Hedge Fund Holders: 21
Vista Energy SAB de CV (NYSE:VIST) is a Mexico-based oil and gas company that ranks among the best high-growth stocks in the energy sector. It is primarily focused on the Vaca Muerta shale formation, which is the largest shale oil and gas play under development outside North America. Vista Energy SAB de CV (NYSE:VIST) is dedicated to expanding its production capabilities and maximizing returns for its shareholders.
In the third quarter of 2024, the company achieved total production of 72,825 barrels of oil equivalent per day (boe/d), marking a significant 47% increase compared to the same period last year. This growth was largely driven by the successful tie-in of 51 new wells over the past year. In Q3 2024, Vista Energy SAB de CV (NYSE:VIST) reported an impressive oil production rate of 63,499 barrels per day, up 53% year-over-year.
Financially, the company reported total revenues of $462.4 million for Q3 2024, which also represents a 53% increase from the same quarter in the previous year. Vista Energy SAB de CV (NYSE:VIST) invested $368.5 million in capital expenditures during this quarter, focusing on drilling and completing wells in Vaca Muerta. This included $282.6 million for drilling and completion activities related to 12 new wells and 15 completions.
Vista Energy SAB de CV (NYSE:VIST) continues to execute its growth strategy effectively, with a total of 40 new wells connected year-to-date. The company remains on track to meet its goal of tying in between 50 and 54 new wells for 2024. Looking ahead, Vista Energy SAB de CV (NYSE:VIST) anticipates further production growth in Q4 due to its ongoing well activity. With strong production growth, increasing revenues, and a clear focus on expanding its operations, Vista Energy SAB de CV (NYSE:VIST) presents a compelling investment opportunity.
9. Northern Oil and Gas Inc. (NYSE:NOG)
5-Year Revenue CAGR: 30.06%
Number of Hedge Fund Holders: 26
Northern Oil and Gas Inc. (NYSE:NOG) is an energy company focused on acquiring, exploring, and producing oil and natural gas properties in the United States. The company operates primarily in the Williston, Uinta, Permian, and Appalachian basins. Northern Oil and Gas Inc. (NYSE:NOG) is one of the best high-growth energy stocks to invest in.
In September 2024, the company successfully completed the acquisition of Delaware Basin assets from Point Energy Partners, LLC. This acquisition was made in partnership with Vital Energy, which will operate most of the assets. The deal includes a multi-year development plan that positions Northern Oil and Gas Inc. (NYSE:NOG) for future growth. Following this, in October 2024, the company closed another significant acquisition of Uinta Basin assets from XCL Resources, LLC. This transaction adds approximately 15,800 net acres and over a decade of Tier 1 inventory to NOG’s portfolio. Northern Oil and Gas Inc. (NYSE:NOG) jointly acquired the assets with SM Energy, Inc., which will operate substantially all the assets.
During the third quarter of 2024, Northern Oil and Gas Inc. (NYSE:NOG) achieved record production levels of 121,815 barrels of oil equivalent per day, with oil comprising 58% of this total. This marks a 19% increase compared to the same quarter in 2023. The company also generated $177.1 million in free cash flow, up 32% from Q2 2024.
Northern Oil and Gas Inc. (NYSE:NOG) has demonstrated a strong commitment to returning value to its shareholders, having returned approximately 50% of its free cash flow through dividends and share repurchases year-to-date. With a solid strategy focused on strategic acquisitions and operational efficiency, NOG is well-positioned for continued growth.
8. Viper Energy Inc. (NASDAQ:VNOM)
5-Year Revenue CAGR: 24.46%
Number of Hedge Fund Holders: 28
Viper Energy Inc. (NASDAQ:VNOM) is a corporation established by Diamondback Energy to acquire and manage oil and natural gas properties in North America, primarily focusing on mineral and royalty interests in the Permian Basin. Essentially all of these interests are leased to working interest owners who bear the costs of operation and development. Viper Energy Inc. (NASDAQ:VNOM) is one of the leading high-growth stocks in the energy sector.
On October 1, 2024, the company completed the acquisition of certain mineral and royalty interest subsidiaries from Tumbleweed Royalty IV, LLC, as part of a previously announced agreement. This follows two other acquisitions from Tumbleweed-Q Royalty Partners and MC Tumbleweed Royalty, which were completed in September 2024. These acquisitions significantly enhance Viper Energy Inc.’s (NASDAQ:VNOM) asset base and align with its strategy of consolidating high-quality mineral interests.
In the third quarter of 2024, Viper Energy Inc. (NASDAQ:VNOM) reported that 330 gross horizontal wells were turned to production on its acreage, with an average royalty interest of 2.1%. Among these, Diamondback operated 81 wells with a higher average royalty interest of 5.1%. The remaining 249 gross wells are operated by third parties. As of September 30, 2024, the company’s footprint of mineral and royalty interests was 32,567 net royalty acres.
Viper Energy Inc.’s (NASDAQ:VNOM) business model allows it to benefit without incurring capital or operational costs typically associated with traditional exploration companies. With a strong acquisition strategy, increasing acreage in prime oil-producing regions, and a business model that minimizes costs while maximizing returns, Viper Energy Inc. (NASDAQ:VNOM) presents a compelling investment opportunity in the energy sector.
7. Matador Resources Company (NYSE:MTDR)
5-Year Revenue CAGR: 29.04%
Number of Hedge Fund Holders: 30
Matador Resources Company (NYSE:MTDR) is an independent energy company focused on exploring, developing, and producing oil and natural gas in the United States. The company primarily operates in the Delaware Basin, targeting the oil-rich Wolfcamp and Bone Spring plays, while also having interests in the Eagle Ford shale and Haynesville shale plays. Matador Resources Company (NYSE:MTDR) also provides midstream services like natural gas processing and oil transportation to support its operations and third-party clients.
In the third quarter of 2024, the company achieved record production levels, averaging 171,480 barrels of oil equivalent (BOE) per day, which exceeded their guidance by 5%. Matador Resources Company’s (NYSE:MTDR) oil production reached 100,315 barrels per day, marking a 3% increase over their guidance. This strong performance contributed to a significant rise in adjusted free cash flow, which increased by 36% to $196.1 million compared to the same period last year.
A key highlight for Matador Resources Company (NYSE:MTDR) was the successful integration of the Ameredev acquisition, completed on September 18, 2024. This acquisition added approximately 33,500 net acres and boosted production by an average of 31,500 BOE per day. The positive impact of this acquisition is already exceeding expectations.
Additionally, Matador Resources Company (NYSE:MTDR) is also focused on reducing drilling and completion costs. For the full year 2024, the company estimates costs will improve to between $925 and $935 per completed lateral foot, reflecting an 8% reduction from earlier estimates. This cost efficiency is driven by operational innovations such as U-Turn wells and remote hydraulic fracturing operations. The combination of record production, strategic acquisitions, and cost efficiencies makes Matador Resources Company (NYSE:MTDR) a compelling investment opportunity in the energy sector.
6. Coterra Energy Inc. (NYSE:CTRA)
5-Year Revenue CAGR: 20.19%
Number of Hedge Fund Holders: 39
Coterra Energy Inc. (NYSE:CTRA) is an independent oil and gas company. It focuses on exploring, developing, and producing oil, natural gas, and natural gas liquids across key regions in the United States, including the Permian Basin, Marcellus Shale, and Anadarko Basin. CTRA ranks among the best high-growth stocks in the energy industry.
In November 2024, Coterra Energy Inc. (NYSE:CTRA) announced two significant acquisitions of assets from Franklin Mountain Energy and Avant Natural Resources for a total consideration of $3.95 billion. This strategic move will enhance Coterra Energy Inc.’s (NYSE:CTRA) core operations in New Mexico. These assets are expected to significantly boost oil production in 2025 and provide additional inventory potential in established and emerging oil-weighted formations.
During the third quarter of 2024, Coterra Energy Inc. (NYSE:CTRA) signed three new long-term agreements to sell 200 million cubic feet per day (MMcfpd) of liquefied natural gas (LNG). Sales are projected to start in 2027 and 2028. This positions the company well to capitalize on the growing demand for liquefied natural gas (LNG) from its operations in the Permian Basin, Anadarko Basin, and Marcellus Shale.
Coterra Energy Inc. (NYSE:CTRA) has also made progress with its Windham Row wells, with 36 out of 57 wells already online and 10 more expected to come online by the end of the year. The remaining 11 wells are expected to come online in the first quarter of 2025. In terms of shareholder returns, the company distributed $265 million in Q3 2024 through dividends and share repurchases. With a strong focus on expanding its footprint and a commitment to returning value to shareholders, Coterra Energy Inc. (NYSE:CTRA) is well-positioned for growth. The combination of strategic acquisitions and robust production plans makes CTRA a compelling investment opportunity in the energy sector.
5. ChampionX Corporation (NASDAQ:CHX)
5-Year Revenue CAGR: 25.10%
Number of Hedge Fund Holders: 40
ChampionX Corporation (NASDAQ:CHX) is a global energy solutions company that provides technologies, equipment, and chemistry solutions to help oil and gas companies produce and drill for oil and gas in a safe, efficient, and sustainable way. The company offers a range of products, including chemical technologies, artificial lift systems, drilling technologies, and digital monitoring solutions. ChampionX Corporation (NASDAQ:CHX) is one of the top high-growth stocks in the energy sector.
In July 2024, the corporation made a strategic move by acquiring RMSpumptools Limited, a company known for its advanced mechanical and electrical solutions for artificial lift applications. This acquisition strengthens ChampionX Corporation’s (NASDAQ:CHX) Production & Automation Technologies (PAT) portfolio and opens up growth opportunities in international markets like the Middle East and Latin America.
In the third quarter of 2024, ChampionX Corporation (NASDAQ:CHX) reported revenues of $907 million, reflecting a 4% year-over-year decrease mainly due to lower sales in Mexico. However, revenue from other regions increased by 6%, indicating strong performance in North America and international markets. The company achieved a net income of $72 million and an adjusted EBITDA margin of 21.8%, showcasing its focus on productivity and profitability.
ChampionX Corporation (NASDAQ:CHX) also secured significant contracts in the Asia Pacific region, including providing engineering services for a new Floating Production Storage and Offloading (FPSO) unit at a large gas condensate field in Australasia. This project is set to enhance regional liquefied natural gas production starting in the first half of 2025. With its innovative solutions, strategic acquisitions, and strong performance, ChampionX Corporation (NASDAQ:CHX) presents a compelling investment opportunity in the energy sector.
4. Cenovus Energy Inc. (NYSE:CVE)
5-Year Revenue CAGR: 22.86%
Number of Hedge Fund Holders: 48
Cenovus Energy Inc. (NYSE:CVE) is a Canadian integrated energy company with operations in Canada, the United States, and the Asia Pacific region. The company focuses on oil sands projects in Alberta, as well as crude oil and natural gas production across Western Canada and offshore projects in China and Indonesia.
In the third quarter of 2024, Cenovus Energy Inc. (NYSE:CVE) demonstrated strong operational performance, generating nearly $2.5 billion in cash from operating activities. The company successfully completed its turnaround at the Christina Lake facility ahead of schedule, resulting in a production increase of 15,000 to 20,000 barrels per day over forecasts. This efficiency reflects Cenovus Energy Inc.’s (NYSE:CVE) commitment to optimizing its operations.
The company also completed a major turnaround at its Lima Refinery on time, ensuring continuous operations by connecting pipelines to the Toledo Refinery. Additionally, two new well pads at the Sunrise project began production and are expected to ramp up further in the fourth quarter. These developments highlight Cenovus Energy Inc.’s (NYSE:CVE) proactive approach to growth.
Looking ahead, Cenovus Energy Inc. (NYSE:CVE) is progressing with significant projects like the Narrows Lake tie-back pipeline, which is 93% complete and expected to add 20,000 to 30,000 barrels per day by mid-2025. The company is also on track with its West White Rose project, which is 85% complete and aims to resume production by year-end. With strong operational results and a clear growth strategy, Cenovus Energy Inc. (NYSE:CVE) represents a solid investment opportunity in the energy sector.
3. Civitas Resources Inc. (NYSE:CIVI)
5-Year Revenue CAGR: 75.85%
Number of Hedge Fund Holders: 48
Civitas Resources Inc. (NYSE:CIVI) is an independent oil and natural gas producer focused on the Denver-Julesburg (DJ) Basin in Colorado and the Permian Basin in Texas and New Mexico. The company stands out as Colorado’s first carbon-neutral oil and gas producer. Civitas Resources Inc. (NYSE:CIVI) is one of the top high-growth stocks in the energy sector.
In the third quarter of 2024, the company reported capital expenditures of $438 million, driven by increased efficiency in drilling and completion activities. During this period, Civitas Resources Inc. (NYSE:CIVI) successfully drilled 26, completed 19, and turned to sales 30 gross operated wells in the Permian Basin. In the DJ Basin, the company drilled 14, completed 29, and turned to sales 40 operated wells.
The company also reported that year-to-date, it has expanded its portfolio by adding over 75 gross locations in the Delaware and Midland Basins through strategic ground game transactions. These developments demonstrate Civitas Resources Inc.’s (NYSE:CIVI) ability to enhance production while managing costs effectively.
Civitas Resources Inc.’s (NYSE:CIVI) operational success is reflected in its production numbers. The company anticipates a 3% increase in oil volumes for the fourth quarter compared to Q3, with October production averaging 165 MBbl/d. Notably, the Blue 4AH well in the DJ Basin set a state record by producing 165 thousand barrels of oil within its first 90 days. With a focus on growth and efficient operations, Civitas Resources Inc. (NYSE:CIVI) presents an appealing option for investors looking for a solid energy stock.
2. Diamondback Energy Inc. (NASDAQ:FANG)
5-Year Revenue CAGR: 22.52%
Number of Hedge Fund Holders: 49
Diamondback Energy Inc. (NASDAQ:FANG) is an independent oil and natural gas company that focuses on the acquisition, development, exploration, and exploitation of oil and natural gas reserves in the Permian Basin in West Texas. Diamondback Energy Inc. (NASDAQ:FANG) ranks among the best high-growth stocks in the energy industry.
In the third quarter of 2024, the company drilled 71 wells in the Midland Basin and 5 in the Delaware Basin. Diamondback Energy Inc. (NASDAQ:FANG) successfully turned 87 wells into production in Midland and 8 in Delaware, showcasing its operational efficiency. With an average lateral length of 12,238 feet, these efforts underline the company’s commitment to maximizing resource extraction.
Diamondback Energy Inc. (NASDAQ:FANG) reported substantial capital expenditures of $688 million during the third quarter of 2024, which included $633 million on drilling and completions. The company also invested $52 million on infrastructure and environmental and $3 million on midstream. These investments reflect a robust strategy to enhance production capabilities and maintain growth momentum.
A notable highlight for Diamondback Energy Inc. (NASDAQ:FANG) was its merger with Endeavor Energy Resources, finalized on September 10, 2024. This merger not only expands the company’s asset base but also positions it as a stronger competitor in the North American oil market. Additionally, on November 3, 2024, Diamondback Energy Inc. (NASDAQ:FANG) entered into an agreement to trade certain Delaware Basin assets with TRP Energy, which is expected to improve the company’s cash flow and production profile. These developments make Diamondback Energy Inc. (NASDAQ:FANG) a compelling choice for investors looking for high-growth opportunities in the energy sector.
1. Permian Resources Corporation (NYSE:PR)
5-Year Revenue CAGR: 39.60%
Number of Hedge Fund Holders: 56
Permian Resources Corporation (NYSE:PR) is a leading independent oil and natural gas company based in Midland, Texas, primarily focused on the acquisition and development of oil and liquids-rich natural gas assets in the Permian Basin. As the second-largest pure-play exploration and production company in this region, Permian Resources Corporation (NYSE:PR) has established a strong foothold in the lucrative Delaware Basin.
In the third quarter of 2024, the company showcased impressive operational efficiency, reducing drilling and completion costs to $800 per lateral foot, a 16% decrease from the previous year. This reduction, coupled with a 16% decrease in drilling cycle times and a 19% increase in completion crew pump hours per day, reflects the Permian Resources Corporation’s (NYSE:PR) commitment to optimizing its operations. Such efficiencies not only lower costs but also enhance profitability, making it an attractive investment option.
On September 17, 2024, Permian Resources Corporation (NYSE:PR) completed the acquisition of the Barilla Draw assets, which added around 29,500 net acres to its portfolio. This strategic move is expected to contribute significantly to production, with the acquired properties already yielding approximately 2 MBoe/d during the third quarter. Additionally, the company has been actively pursuing smaller grassroots acquisitions, adding about 460 net acres during the third quarter.
On December 10, Permian Resources Corporation (NYSE:PR) announced that it has agreed to sell its natural gas and oil gathering systems in Reeves County, Texas, to Kinetik Holdings for $180 million. This divestiture of a non-core asset, expected to close in the first quarter of 2025, aims to streamline operations and drive value for investors. With its strong operational improvements and strategic acquisitions, Permian Resources Corporation (NYSE:PR) presents a compelling case.
Aristotle Capital Boston, LLC stated the following regarding Permian Resources Corporation (NYSE:PR) in its “Small/Mid Cap Equity Strategy” third quarter 2024 investor letter:
“Permian Resources Corporation (NYSE:PR) is a Texas-based oil & gas exploration & production company with a large acreage position and deep inventory of high return potential drilling locations in the core of the Permian Basin. We expect management to continue to execute on its strategy of optimizing returns, diligently allocating capital to new opportunities, and returning excess capital to shareholders.”
Overall, PR ranks first among the 10 high-growth energy stocks to invest in. While we acknowledge the potential of energy companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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