Oil Price Surge Lifts Stocks of Oil and Gas Producers Amid Market Volatility
Oil prices have surged, causing ripples in markets and lifting some stocks while pressuring others that rely heavily on fuel.
Investors who ignore this shift risk missing out or holding the wrong exposure at the wrong time. This article explores three large oil and gas producers closely tied to the latest move in crude: InPlay Oil (TSX:IPO), Paramount Resources (TSX:POU), and PHX Energy Services (TSX:PHX).
InPlay Oil, a Canadian upstream producer, acquires, explores, develops, and produces crude oil, natural gas, and natural gas liquids in West Central Alberta. The company's operations are closely tied to Canadian crude and gas pricing, with CA$317.9 million in revenue generated from oil and gas exploration and production activities.
The company is attractively valued on cash flow and P/S metrics, with a 5.86% dividend yield and recent buybacks indicating that management is returning cash to shareholders. However, there are risks involved: the company has had periods of losses, and its dividend is not well covered by earnings or free cash flow.
Paramount Resources, another Canadian oil and gas producer, explores for and develops large conventional and unconventional petroleum and natural gas reserves in Alberta. The company's operations are closely tied to Canadian oil and gas pricing, with CA$1.05 billion in revenue generated from operations.
The stock carries a rich P/E ratio, a modest 1.88% dividend yield that is not well covered by free cash flow, and a relatively low 4.3% return on equity (ROE). However, the company's accelerating production story and recent Sinclair Montney well results suggest potential upside.
PHX Energy Services provides horizontal and directional drilling services to oil and gas producers in Canada, the United States, and internationally. The company's technology suite helps clients drill more efficiently in complex wells that typically see higher demand when crude prices are strong.