Strait of Hormuz Tensions Shine Light on Oil and Gas Stocks

Oil and gas stocks are experiencing stress as Brent prices move sharply due to tensions in the Strait of Hormuz. Among them, GeoPark (GPRK), Topaz Energy (TSX:TPZ), and Permian Resources (PR) stand out for their unique profiles.

GeoPark is a Colombia-based oil and gas exploration company with operations across Latin America. It has a market cap of $623 million and provides direct exposure to Brent price movements. The company aims to reduce well costs and focus on short-cycle projects, which have led to higher margins and a return to profit in 2026.

However, GeoPark's balance sheet relies heavily on debt, its portfolio is concentrated in Colombia, and earnings include one-off gains. This may warrant closer examination of the quality of future cash flows.

Topaz Energy, on the other hand, is a Calgary-based royalty and infrastructure company that earns income from other producers' oil and gas output. Its asset-light royalty model collects a share of higher commodity-linked revenues without taking on drilling costs. Topaz has a market cap of about $4.7 billion and its stock carries funding risk due to external borrowing.

Permian Resources is a pure-play oil and gas producer focused on the Delaware Basin in West Texas and New Mexico. Its production is closely tied to crude benchmarks, and it has used hedging to lock in floors above $80 per barrel. However, the company faces earnings pressure over the past year and its dividend is not fully backed by free cash flow.

These companies have different risk profiles and exposure to oil prices, making them worth considering for investors watching the Strait of Hormuz headlines.