The oil and gas industry consists of different companies which are involved in the exploration, transportation, extraction, and refining, of gas and oil products. These companies also include other services such as well maintenance and drilling. The past couple of years have been hard on the energy sector and the pandemic has only served to make the situation worse. Small companies have suffered more than the bigger companies and are deeply shale indebted. But the past few months have been an exercise in the companies trying to recover.
Renewable Energy Group Inc (NASDAQ: REGI)
Renewable Energy Group (REGI) company is a biodiesel production company which creates biodiesel and renewable diesel with the help of it 13 bio refineries and a processing facility. It uses biomass feed stocks for manufacturing renewable diesel and biodiesel, such as cooking oils, animal fats, and distilled corn oil. The stock has seen a profitable time during the pandemic with its stocks having gone 100 per cent up in the last six months and a total of 215 per cent up over the previous year due to its consistent performance even since the outbreak of the virus.
According to the recent earnings call, the small-cap company sold 176 million gallons of renewable diesel and biodiesel in the recent quarter with a revenue of $576.05 million, which was $21.5 million higher than the estimated consensus by Wall Street.
Phillips 66 (NYSE: PSX)
Phillips 66 (PSX) is one of the lowest cost producers in the oil and gas industry and this is due to its large-scale operations. It is amongst the top refining companies and it has operations in both Europe and the United States. Its talents lie in manufacturing specialty goods such as lubricants and business distribution of refined products. It also has significant stakes in two of the limited master partnerships, DCP Midstream and Phillips 66 Partners, and also in chemicals through its joint venture with Chevron on CPChem.
While the year has been difficult for Phillips 66 with the demand for refined products lowering this year affecting its performance, Phillips 66 still remains an attractive stock to invest in asit has a reduced share price right now and the 7.7 per cent dividend yield this year. And with the world reopening next year, the stock prices are expected to improve as the demand for refined products will be higher. Phillips 66’s financial profile has also been strong with its investment grade balance sheet and financially flexible situation.
Apache Corporation (NASDAQ: APA)
Apache Corporation (APA) is a Houston based company which is a major player in the Permian Basin with its high technology and impressive discoveries. Most recently, Apache Corp discovered the Kwaskwasi-1 well which contains 912 feet of net oil and unstable oil/gas condensate pay. This year, Apache Corp was one of the first companies to initiate deep spending cuts after the crash of oil prices in March and it lowered its 2020 capex from $1.6-$1.9 billion to $1-$1.2 billion and also managed to lower its dividend by 90 per cent, from $0.25 per share to $0.025 per share.
The company also stated that it would utilize excess cash to pay down its debt and also keep a positive cash flow as until the WTI prices continued to stay more than $30 per barrel. This appears to satisfy its investors as the shares of Apache Corp went up by almost 70 per cent in the last month.