8 Best Oil and Gas Penny Stocks to Buy Now

In this article, we are going to discuss the 8 best oil and gas penny stocks to buy now.

The global oil and gas prices have received a massive boost from the ongoing US-Iran war, which has led to Iran blocking the Strait of Hormuz. The waterway handles around a fifth of the global crude oil and LNG supply. Moreover, both sides have carried out several attacks on the region’s key energy infrastructure, leading to further supply disruptions.

Moreover, the global oil market was further jolted when Russia recently announced that at least 40% of its oil export capacity is currently at a halt following the Ukrainian drone attacks, a disputed ​attack on a major pipeline, and the seizure of tankers. This marks the most severe oil supply disruption in the modern history of Russia, the second-largest oil exporter in the world.

As a result, the Brent crude price is currently hovering above the $115 per barrel mark, up 89% year-to-date and at its highest level since Russia invaded Ukraine in 2022.

That said, the soaring prices are providing a massive cash flow boost to Western oil producers, both big and small. According to the intelligence firm Rystad Energy, the US shale oil producers could earn an additional $63 billion in sales this year from the multi-year high in prices.

With that said, here are the Best Oil and Gas Penny Stocks to Buy in 2026.

Our Methodology

To collect data for this article, we used our stock screeners to identify oil and gas stocks with a price per share of less than $5. Then we ranked these stocks by the number of hedge funds invested in them at the end of Q4 2025, as per the Insider Monkey database. The following are the Best Oil and Gas Penny Stocks to Invest in.

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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).

8. U.S. Energy Corp. (NASDAQ:USEG)

Number of Hedge Fund Holders: 1

U.S. Energy Corp. (NASDAQ:USEG) is a growth-focused energy company engaged in operating a portfolio of high-quality producing assets.

U.S. Energy Corp. announced on March 18 that it had reached a Final Investment Decision (FID) for the construction of its processing facility at the Big Sky Carbon Hub in Montana. The company also revealed that it had signed an Engineering, Procurement, and Construction agreement with CANUSA EPC.

The facility is designed for approximately 8 MMcf/d of inlet capacity, with a target to produce around 12 MMcf of helium and 125,000 metric tons of refined CO₂ annually at initial operations. The company expects to qualify for approximately $85/metric ton in Section 45Q federal tax credits, supporting an estimated $130 million in Phase 1 tax credit value.

U.S. Energy Corp. expects to commence gathering pipeline installation in the spring of this year, with commissioning targeted in the third quarter. The company then expects to initiate helium sales and carbon management operations in the first quarter of 2027.

Ryan Smith, President and CEO of U.S. Energy Corp., commented:

“Today’s announcements represent the culmination of 18 months of deliberate, disciplined execution, and the beginning of what we believe will be a transformational chapter for U.S. Energy. We have reached FID, signed our EPC contract with CANUSA EPC, and construction is underway at Big Sky. Our recent successful capital markets activity has pulled forward both the timeline and certainty of construction, and today we are putting that capital to work. CANUSA EPC brings precisely the construction and execution expertise required to deliver a complex, integrated industrial gas and carbon management facility on time and on budget. With three producing wells online, final engineering complete, a purpose-built plant site secured, and EPA MRV applications submitted, every element of a de-risked project is in place.

As global helium markets continue to tighten amid ongoing supply disruptions and increasing geopolitical uncertainty, we believe Big Sky is uniquely positioned to provide a secure, domestic source of this critical gas alongside its broader industrial gas and carbon management capabilities. We expect the market to increasingly recognize the differentiated, multi-revenue nature of this platform as we move through construction and toward cash flow generation at Big Sky in early 2027.”

7. Empire Petroleum Corporation (NYSEAMERICAN:EP)

Number of Hedge Fund Holders: 1

Empire Petroleum Corporation (NYSE:EP) is a conventional oil and natural gas producer with a main focus in the US onshore.

Empire Petroleum Corporation announced on March 18 that it had elected to participate in a new oil and natural gas development program in Louisiana, indicating a meaningful addition to the company’s ongoing development activities.

While the three-well program targets hydrocarbon-bearing formations, the actual oil-to-gas mix will be confirmed through ongoing development. Empire’s working interest in the initial well will be 25%, with the company funding its portion of drilling and completion costs through the issuance of approximately 700,000 shares of its common stock.

Based on initial subsurface data, the well demonstrated a strong hydrocarbon flare while holding over 9,100 psi of back pressure with 16.5+ lb/gal drilling mud. The completion operations on the initial well are expected to begin next month, with initial production testing to follow.

Mike Morrisett, President and CEO of Empire Petroleum Corporation, stated:

“This opportunity aligns with the kind of development work that complements our existing operations. We appreciate the comprehensive technical work completed to date and look forward to participating in the next phase of this development. This participation also opens the opportunity to evaluate potential future midstream-adjacent opportunities that could, over time, provide stable and recurring cash flow.”

6. Permianville Royalty Trust (NYSE:PVL)

Number of Hedge Fund Holders: 2

Permianville Royalty Trust (NYSE:PVL) operates as a statutory trust. It is involved in the acquisition and holding of net profits interest representing the right to receive 80% of the net profits from the sale of oil and natural gas production from properties located in the states of Texas, Louisiana, and New Mexico, as well as unconventional assets in the Permian and Haynesville basins.

Permianville Royalty Trust announced its FY 2025 results on March 25. The company posted net profits attributable to the Underlying Properties of $6.2 million for the year, down from $6.7 million in FY 2024. An important factor driving this downturn was the declining oil prices. The company’s realized oil sales prices decreased by 13% in 2025 compared to the previous year, which reduced revenues by $4.5 million. That said, PVL’s natural gas sales grew by $5.6 million compared to 2024, driven by a $1.8 million increase due to higher produced volumes and a $3.8 million increase due to higher realized prices.

Permianville Royalty Trust also declared a dividend of $0.01 per share on March 17, up from its previous payout of $0.005 per share in February. The dividend is payable on April 14 to shareholders of record on March 31.

5. Martin Midstream Partners L.P. (NASDAQ:MMLP)

Number of Hedge Fund Holders: 3

Next on our list of the Best Oil and Gas Penny Stocks is Martin Midstream Partners L.P. (NASDAQ:MMLP). The company provides terminalling, processing, and storage services for petroleum products and by-products in the United States.

On March 12, Stifel analyst Selman Akyol lowered the firm’s price target on Martin Midstream Partners L.P. from $4 to $3, but maintained a ‘Hold’ rating on the shares. The revised target still indicates an upside potential of 20% from the current share price.

The analyst noted that the sulfur sector has benefited from the Venezuelan oil flowing into the United States following the ouster of Nicolas Maduro. However, the fertilizer industry is witnessing a decrease in demand due to the challenging growing conditions for the cotton crop in Texas.

Martin Midstream Partners L.P.’s Sulfur Services segment is expected to deliver adjusted EBITDA of $30.3 million in 2026, consistent with last year’s results. The company already expected the fertilizer market to remain compressed due to the rising sulfur input costs. The firm is forecasting its FY 2026 adjusted EBITDA to come in at $96.5 million.

4. OMS Energy Technologies Inc. (NASDAQ:OMSE)

Number of Hedge Fund Holders: 5

OMS Energy Technologies Inc. (NASDAQ:OMSE) is a growth-oriented manufacturer of surface wellhead systems (SWS) and oil country tubular goods (OCTG) for the oil and gas industry.

OMS Energy Technologies Inc. revealed on March 20 that it had received a $11 million call-off order for specialty connectors and pipes from Saudi Aramco under an existing long-term supply agreement. The order was received through the company’s Saudi Arabia subsidiary, OMS Saudi, with the products scheduled for delivery in 2026.

OMS Energy Technologies Inc.’s supply agreement with the largest oil company in the world was signed in early 2024 and works on a call-off basis, under which Saudi Aramco places orders for specialty connectors and pipes as per its operational requirements.

The development comes only a day after OMS Energy Technologies Inc. had secured surface wellhead system orders and a contract extension totaling around $2.6 million from operators in Oman, Pakistan, and Indonesia.

How Meng Hock, Chairman and CEO of OMS Energy Technologies Inc. stated:

“This US$11 million call-off order highlights the enduring value of our long-term partnership with Saudi Aramco, providing significant demand visibility for our specialty connector business. Supported by a stable revenue pipeline, debt-free balance sheet and strong cash position, we are well-equipped to invest in the capacity and capabilities needed to serve Aramco’s growing needs and strengthen our position in Saudi Arabia, while expanding our broader international footprint to drive long-term shareholder value.”

3. KLX Energy Services Holdings, Inc. (NASDAQ:KLXE)

Number of Hedge Fund Holders: 9

KLX Energy Services Holdings, Inc. (NASDAQ:KLXE) is a leading US onshore provider of mission-critical oilfield services focused on completion, intervention, and production activities for the most technically demanding wells.

KLX Energy Services Holdings, Inc. reported its Q4 2025 results on March 12, with the company’s adjusted loss per share of $0.76 exceeding estimates by $0.04. The firm also achieved a revenue of $156.8 million, down by over 5% YoY due to a decrease in activity and the expected seasonal decline in the fourth quarter. With an adjusted EBITDA of $23 million and adjusted EBITDA margin of 14%, the fourth quarter was KLX’s most profitable of the year.

KLX Energy Services Holdings, Inc. posted a revenue of $637 million for the full-year 2025, while its adjusted EBITDA and adjusted EBITDA margin stood at $76 million and 12%, respectively.

KLX Energy Services Holdings, Inc. is projecting a revenue of $145 million to $150 million for Q1 2026, down approximately 3% YoY, driven by the familiar seasonal combination of customer budget resets, slower restarts of completion programs and weather-related disruptions. However, the company then expects the second quarter revenue to rebound to the $160 million to $170 million range, which is higher than the same period compared to last year.

2. W&T Offshore, Inc. (NYSE:WTI)

Number of Hedge Fund Holders: 20

W&T Offshore, Inc. is an independent oil and natural gas producer, active in the exploration, development, and acquisition of oil and natural gas in the Gulf of America.

W&T Offshore, Inc. reported its Q4 2025 results on March 16, with the company’s loss per share of $0.14 falling behind estimates by $0.02. Revenue for the quarter came in at $121.7 million, up 1.1% YoY but still missing expectations by $765,000. That said, W&T grew its production by 2% sequentially and 13% YoY during the fourth quarter.

W&T Offshore, Inc. also highlighted several key achievements for its full-year 2025. The company increased production every quarter during the year, from 30,500 boed in the first quarter to 36,200 in Q4. Moreover, the oil and gas producer managed to bolster its balance sheet by ending the year with almost $141 million in cash, up by $31 million from the end of 2024. Net debt also reduced by $74 million to $210 million.

W&T Offshore, Inc. is projecting the midpoint of its Q1 2026 production at around 35,000 boed, with the full-year 2026 production midpoint also expected at around the same level, assuming no additional acquisitions or drilling.

1. Kosmos Energy Ltd. (NYSE:KOS)

Number of Hedge Fund Holders: 21

Topping our list of the Best Oil and Gas Penny Stocks is Kosmos Energy Ltd. (NYSE:KOS). It is a leading deepwater exploration and production company focused on meeting the world’s growing demand for energy.

On March 23, Goldman Sachs raised its price target on Kosmos Energy Ltd. from $2 to $2.25, while maintaining a ‘Neutral’ rating on the shares. The bumped target indicates a downside of over 22% from the current levels.

Kosmos Energy Ltd. reported its Q4 2025 results earlier this month, with the company falling behind estimates in both earnings and revenue. That said, Kosmos announced a strong outlook for FY 2026, with a target to deliver 15% YoY production growth coming predominantly from its core, Jubilee, and GTA assets. Moreover, the company aims to achieve this while also reducing its total operating costs by 20%, with the combination of higher production and lower costs expected to reduce OpEx per barrel by around 35%. Notably, the firm is also aiming to cut its debt by at least 10% by the end of 2026.

Kosmos Energy Ltd. was also recently included in our list of the 10 Small-Cap Stocks Insiders are Buying Recently.

READ NEXT: 14 Best Energy Stocks to Buy According to Wall Street Analysts and 13 Oil Stocks with Highest Dividends

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