Why Are Investors Watching These 4 Energy Penny Stocks?
Energy penny stocks have become some of the most popular investments in the COVID-era of trading. There are a few key reasons why these have shot up so much in value in the past few months. When it comes to energy stocks, there are two distinct areas of the market. First, there are energy penny stocks that deal with oil and natural gas. These companies saw a large drop in value as demand for fuel shot down earlier in the year.
Now, around eleven months after the pandemic began, we are beginning to see hope from investors for greater energy demand. One of the main factors for the growth of oil and gas penny stocks is a COVID vaccine. If a vaccine can see widespread adoption and covid comes to an end, there’s no doubt that energy consumption would go up. This could mean a bullish trading pattern for fossil fuel-based energy in the next few months.
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Second, we have renewable energy penny stocks. These are companies that produce anything from solar/wind power to natural gas. These companies have seen a great deal of bullish momentum for two reasons. First, the election of Joe Biden means that the U.S. will move toward becoming fully renewable energy-based within the next few decades. In addition, the ending of covid would be a large benefit to the renewable energy market. With all of this in mind, let’s take a look at four energy stocks to watch as covid vaccines hit the market.
Top Energy Penny Stocks to Watch, December 2020
- Kosmos Energy Ltd. (KOS Stock Report)
- Southwestern Energy Company (SWN Stock Report)
- Denison Mines Corp. (DNN Stock Report)
- Gran Tierra Energy Inc. (GTE Stock Report)
Energy Penny Stocks to Buy [or avoid] #1: Kosmos Energy Ltd.
Kosmos Energy Ltd. is an independent oil and gas exploration company working in the Atlantic. The company works by utilizing a full-cycle deepwater drilling method in order to produce oil and gas. The company states that it has assets around the world in areas such as Ghana, Equatorial Guinea, and the Guld of Mexico. Recently, Kosmos Energy announced that it has closed on a transaction to lower its interests in Suriname and other areas in Africa. This deal should bring in around $95 million in funds as well as potential future payments of $100 million or so.
Andrew Inglis, CEO of the company stated that “we are pleased to complete this transaction with Shell on schedule. The proceeds enable Kosmos to strengthen the balance sheet while accelerating high graded exploration opportunities in proven basins. The contingent payments locked into the agreement with Shell ensure we retain upside from frontier exploration with no further investment.”
On December 10th, shares of KOS stock are up by as much as 13.7% during intraday trading. In the past month, shares have shot up by over 85%, and since September, around 120%. While KOS stock is definitely volatile due to its penny stock pricing, it has shown a great deal of bullish interest from investors this month.
Energy Penny Stocks to Buy [or avoid] #2: Southwestern Energy Company
Southwestern Energy Company is another big gaining energy penny stock on December 10th. During the trading day, shares of SWN shot up by a solid 12.8% or so. In the past month, shares are up by around 20%; and since October, shares are up by around 50%. Southwestern Energy Company works similarly to Kosmos in that it explores and develops natural gas and oil.
At the end of 2019, the company stated that it had around 12,721 billion cubic feet of natural gas equivalent (Bcfe). As a large energy company, SWN has benefitted from vaccine hopes in the U.S. and abroad. The goal is to begin seeing higher demand as covid hopefully lessens in severity in the coming months. In November, Southwestern Energy announced that it had completed the acquisition of Montage Resources.
CEO of the company, Bill Way, stated that “this strategic transaction represents another deliberate step in our disciplined repositioning strategy. We strengthened our position as a premier producer in the Appalachia basin with an at-market, accretive acquisition that provides a step change in free cash flow. Starting today, we are delivering on our commitment of at least $30 million in synergies.”
One of the things that separates Southwestern Energy from other energy penny stocks is that it produces both natural gas and oil. This means that it is a part of the fossil fuels industry as well as the renewable energy market. With both of these seeing heightened interest from investors, SWN stock could be one to watch.
Energy Penny Stocks to Buy [or avoid] #3: Denison Mines Corp.
Denison Mines Corp. is different than the other penny stocks on this list in that it explores and develops uranium. The company states that it has a 90% interest in the Wheeler River Uranium project which is located in Canada. During 2020, Denison Mines has been working on several key projects.
In July, the company announced that its Wheeler River project would be up and running once again following a covid-related shutdown. In October, the company completed a public offering of around 51 million common shares. With this, it was able to raise almost $19 million. The company states that the proceeds from this offering will be used in the evaluation and assessment of activities at the Wheeler River project.
For some context, Wheeler River stands as the largest undeveloped uranium project in the Athabasca Basin. The company states that this resource could yield up to 132 million pounds of 3.3% grade uranium. Because of its solid financial situation and the recent uptick in demand for uranium, Denison Mines has seen a lot of popularity in the past few months. While the uranium market does move slower than traditional energy markets, bullish interest continues to look high. Additionally, because it has resumed work at its Wheeler River project, the company should be on target to reach its uranium goals for year-end 2020.
Energy Penny Stocks to Buy [or avoid] #4: Gran Tierra Energy Inc.
Gran Tierra Energy Inc. operates as an international energy company working on both oil and natural gas exploration. The company states that its primary assets are located in South America. This includes both Colombia and Ecuador. Recently, the company announced its 2021 capital budget as well as a financial update. In the report, the company stated that it recently resumed production at its key locations following a covid-related shutdown. The company also stated that it believes 2021 could have a great deal of growth for it.
Currently, the company has around 5% of its capital going to exploration activities. These activities mostly pertain to the Putumayo Basin in Colombia as well as the Oriente Basin in Ecuador. Both of these countries have also put significant emphasis on their desire to have mining operations continue in the near future. The company stated that the Columbian government has allowed for tax refunds and extensions on certain contractual obligations.
On December 10th, shares of GTE stock were up by as much as 8% or so during intraday trading. In the past month, shares have shot up almost 70%; and since November, around 100%. Whether or not this makes the list of penny stocks to buy right now remains up to investors.