Energy Stocks: Finding Value in Higher Rates

Higher bond yields and stubborn inflation have reshaped how investors think about risk in the energy sector. This shift has created opportunities for mispricing, where stress and opportunity intersect.

Kosmos Energy (KOS) is one of the purest plays in the Global Energy Producers and Oil & Gas Services screener. The company focuses on deepwater oil and gas exploration, development, and production, generating about US$1.6b from this activity.

The business has a market cap of about US$1.76b and sits in the mid-cap bracket where project execution and balance sheet decisions can materially shift the equity story. Kosmos Energy is tightly linked to commodity prices and offshore spending, but it also brings meaningful production scale, a growing LNG footprint, and recent progress on pushing debt maturities further out.

Ring Energy (REI) is another company in this screener, with its entire US$324 million of revenue coming from exploration and production across Permian Basin acreage in Texas and New Mexico. The company sells oil and gas mainly to end users and marketers and gives investors focused exposure to commodity-driven cash flows at a smaller scale than the majors.

Gulfport Energy (GPOR) is a pure-play upstream producer with all of its roughly US$1.4b in revenue coming from oil and gas exploration and production. The company focuses on natural gas, crude oil, and NGLs in the Utica and Marcellus plays in eastern Ohio and the SCOOP Woodford and Springer formations in central Oklahoma.