In this article, we will discuss the 12 Best Oil and Gas Penny Stocks to Invest in Now.
The oil and gas sector faces a pivotal moment in 2025 as it deals with complex dynamics from global tensions, evolving policy directions, and rising innovation. The stable pricing in 2024, after many decades, now faces hurdles due to geopolitical stresses, energy transition demands, and economic shifts. Companies are keeping tight capital control while boosting tech productivity, as analysts predict oil will stay between $70 and $80 per barrel. However, geopolitical instability and unpredictability could push prices higher.
Despite these obstacles, operations have advanced as the sector’s capital spending has increased 50% from 2020. Meanwhile, returns are on the upswing as businesses focus on high-performing assets and refine their portfolios. Many companies are betting on digital and green tech—carbon capture, hydrogen, and data-driven exploration—as part of a wider clean energy push. Global oil trade issues have shifted focus to natural gas as a second key revenue source, thus, gas prices have jumped lately. According to Yahoo Finance data, LNG futures are up nearly 40% in six months and 91.65% year-over-year at Henry Hub, thanks to low stockpiles, winter demand, and rising LNG exports.
Although market instability persists, as recent OPEC+ supply boost and US-China trade tensions have pushed down crude prices. As of April 2025, West Texas Intermediate (WTI) crude sits near a three-year low of $61.5 per barrel. The US Energy Information Administration (EIA) sees an average of $63.88/bbl this year, further dropping to $57.48 in 2026. This decline, plus tariff hurdles and export problems, might squeeze US oil output since profit thresholds sit between $61-$70/bbl. This shows how even major forecasters are scaling back amid trade fights and project holdups.
Now, the trend has shifted to natural gas as the growth driver for the oil and gas industry. Europe remains central to global LNG trade, taking 55% of US LNG exports in 2024, per LSEG data. As seen last December, 69% of US LNG shipments (5.84 MT) went to Europe, up from November’s 5.09 MT, driven by winter needs and limited Russian supply. As trade tensions add complications, China’s 15% tariff on US LNG threatens new deals despite existing contracts.
The outlook is mixed but hopeful as oil demand rebounds post-pandemic and a global boost in energy diversification. Although solar energy helps reduce fossil fuel dependence, it won’t replace it entirely, which shows the significance of a harmonized energy mix. In the same way, the main alternatives—solar, wind, and nuclear—each have scaling or consistency limits. Oil and gas, especially natural gas, remain vital to global growth and energy security, creating openings for agile, cost-effective penny stocks.
While major companies grab headlines with billion-dollar projects, penny stocks—small-cap oil and gas companies trading under $5—attract interest for their high-growth potential. Let’s examine the 12 Best Oil and Gas Penny Stocks to Invest in Now.
An oil rig pumping station with a clear sky behind it, illustrating the company’s wide range of activities in the oil and gas business.
Our Methodology
We first sifted through ETFs, online rankings, and internet lists to compile a list of the best oil and gas stocks under $5. We then selected the 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. For tied stocks, we ranked them by the value of their hedge fund stakes. The hedge fund data was sourced from Insider Monkey’s database, which tracks the moves of over 1000 elite money managers.
Why are we interested in 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
12. W&T Offshore, Inc. (NYSE:WTI)
Number of Hedge Fund Holders: 14
Share Price as of April 16: $1.12
W&T Offshore, Inc. (NYSE:WTI) explores and produces oil and gas in shallow Gulf of Mexico waters. It uses a low-cost model and grows through smart acquisitions, as seen in January 2024, when it spent $77 million to add six fields, boosting reserves and short-term production.
For the fiscal year ended December 31, 2024, W&T Offshore, Inc. (NYSE:WTI) delivered 33,300 BOE daily and generated $154 million in adjusted EBITDA with $45 million in free cash flow. Proven reserves grew 3% to 127 million BOE, and oil-centered reserves jumped 39%.
In early 2025, W&T improved its finances with a $350 million notes offering at lower interest rates and reimbursement of prior debt, cutting total debt by $39 million. W&T Offshore, Inc. (NYSE:WTI) secured a new credit facility and got over $70 million from non-core sales and insurance claims.
For 2025, W&T expects full-year production of about 34,000 BOE daily, driven by continued production from new acquisitions. With capital spending between $34 and $42 million, the company remains persistent in hunting for good acquisition targets to reinforce its offshore businesses.
While oil and gas penny stocks carry risks, W&T Offshore, Inc. (NYSE:WTI) manages these through strategic assets, growing reserves, and tight financial control. These moves make the company one of the more promising penny stocks in the sector to invest in.
11. Granite Ridge Resources, Inc (NYSE:GRNT)
Number of Hedge Fund Holders: 14
Share Price as of April 16: $4.91
Granite Ridge Resources, Inc. (NYSE:GRNT) works as a non-operated U.S. oil and gas company with holdings across the Permian, Eagle Ford, Bakken, Haynesville, and DJ basins. The company is changing strategy to put more capital into operated partnerships where it holds a majority interest, giving Granite better control over development and revenue. This hybrid approach allows the company to maintain capital discipline while pursuing high-return projects.
For the year ended December 31, 2024, Granite Ridge Resources, Inc. (NYSE:GRNT) produced 25,000 BOE/d, reaching a record 27,000 BOE/d, with oil accounting for up to 53% of output in Q4. Full-year adjusted EBITDAX hit $290.8 million, with Q4 contributing $82.6 million—up 10% from Q3. Q4 adjusted net income was $22.7 million ($0.17 per share), in addition to the company cutting operating costs by 8% year-over-year to $6.29/BOE.
For 2025, Granite Ridge Resources, Inc. (NYSE:GRNT) expects more production growth with continued oil dominance. It has planned about $300 million in capital spending, mostly for Permian Basin operated partnerships. The company is running two rigs in the Delaware sub-basin with a good inventory, and early results from operated projects look promising, reinforcing management’s evolved strategies.
Granite Ridge Resources, Inc. (NYSE:GRNT) offers both growth and income. With a 7%+ dividend yield and steady per-share production growth targets, it stands out among the best oil and gas penny stocks. The company’s conservative balance sheet and hands-on model may offer more stability than typical speculative plays.
10. Cosan S.A. (NYSE:CSAN)
Number of Hedge Fund Holders: 14
Share Price as of April 16: $4.76
Cosan S.A. (NYSE:CSAN), a Brazilian powerhouse for energy and logistics, specializes in operations like fuel distribution, natural gas infrastructure, ethanol and bioenergy production, and logistics. It works through companies like Raízen, Compass, and Moove across the oil and gas sector, distributing fuel, selling electricity and natural gas, and running gas terminals. Moreover, the Compass segment is working to expand gas pipelines throughout Brazil, helping with long-term clean energy goals.
For the year ended December 31, 2024, Cosan S.A. (NYSE:CSAN) brought in about $6.1 billion in portfolio EBITDA, showing strength in most areas. Although it suffered a net loss of around $183 million due to one-time events and write-downs from selling its Vale stake. The company’s corporate debt hit $4.8 billion, with a debt coverage ratio of 1.1x, below its target of 1.5x.
Despite weather problems impacting Raízen’s sugar and ethanol production, other divisions like Rumo and Compass did well. Where Rumo achieved record results from higher rates and increased shipping volumes, Compass grew its gas distribution and continued ramping up Edge, its gas terminal. Additionally, Moove increased revenues through better supply chain management, despite fewer sales overall.
Going forward, Cosan S.A. (NYSE:CSAN) aims to cut its holding company debt by at least 30% after selling its Vale stake in January 2025. It is reviewing Raízen’s assets, simultaneously looking for strategic partners in electricity and renewables. Although the company won’t issue new shares, it might sell certain assets to improve financial discipline and cash flow.
