We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
2 Discounted Microcap Energy Stocks to Buy Amid the Sector Rally
Read MoreHide Full Article
The energy sector has been one of the market's strongest performers this year, largely driven by geopolitical tensions in the Middle East. The Iran conflict, which ultimately resulted in the temporary shutdown of the Strait of Hormuz — a critical artery for global oil shipments — sparked concerns over supply disruptions and pushed crude prices sharply higher.
As energy stocks rallied alongside rising oil prices, bargain opportunities within the sector became increasingly scarce. However, a few names still appear attractively valued despite the industry's impressive run. Against this backdrop, investors may want to consider two micro-cap energy companies — SandRidge Energy, Inc. (SD - Free Report) and PrimeEnergy Resources Corporation (PNRG - Free Report) — which continue to trade at discounted valuations.
Over the past year, shares of SandRidge have advanced 19.1%, whereas PrimeEnergy has returned 17.8%. Both companies have outperformed their subindustry, which gained 13.2% during the same period.
Image Source: Zacks Investment Research
Energy Stocks Benefit From the Oil Rally
The West Texas Intermediate (WTI) crude climbed from just above $70 per barrel a year ago to more than $100 per barrel earlier this year as concerns surrounding the Iran conflict intensified. However, oil prices have recently retreated after reports emerged that the United States and Iran reached a framework agreement aimed at ending hostilities and reopening the Strait of Hormuz. As a result, WTI is currently trading around $75 per barrel.
Even with the recent pullback in crude prices, energy equities have enjoyed a strong year. The sector has generated a year-to-date gain of 24.8%, reflecting investor enthusiasm for companies positioned to benefit from elevated commodity prices.
Image Source: Zacks Investment Research
2 Undervalued Energy Stocks Worth Considering: PNRG & SD
PrimeEnergy: PNRG possesses a sizable number of development opportunities across Texas and Oklahoma, providing the company with a lengthy growth runway. Its ongoing horizontal drilling initiatives in the Midland Basin remain a key focus, supported by a substantial acreage position in West Texas and eastern New Mexico. The company controls 16,838 gross acres (9,420 net acres), primarily concentrated in Reagan, Upton and Martin counties. Management estimates that this acreage could ultimately support 100 additional horizontal wells.
The company's growth visibility extends into the next several years. PrimeEnergy has identified drilling projects for 2026 and 2027 that may require roughly $187 million in capital spending. These opportunities include prospective Wolfcamp "D" development and additional drilling locations throughout Upton and Martin counties. This extensive inventory enables the company to continue building reserves while maintaining flexibility to adapt development activity according to market conditions.
From a valuation standpoint, PrimeEnergy appears inexpensive. The stock currently trades at a trailing 12-month enterprise value-to-EBITDA (EV/EBITDA) multiple of 2.75X, well below the industry average of 11.24X.
Image Source: Zacks Investment Research
SandRidge: The company continues to make progress through its operated Cherokee development program, which remains the company's primary growth driver. Recent operating results suggest that the program's success is extending beyond its initial development phases, providing greater confidence in future production growth.
Operational activity remained active throughout the first quarter of 2026. The company drilled two wells and completed three, while subsequently bringing its ninth operated well into production and continuing work on its 11th well. SandRidge plans to drill 10 operated wells and complete eight during 2026, with two completions expected to carry over into 2027.
Management estimates gross well costs of $9-$11 million and anticipates total capital expenditure between $76 million and $97 million this year. Importantly, approximately 95% of the company's leasehold acreage is held by production, allowing SandRidge to maintain considerable flexibility in rising development activities.
Like PrimeEnergy, SandRidge trades at a meaningful discount to the industry valuation levels. The company's trailing 12-month EV/EBITDA ratio stands at 4.29X, significantly below the broader industry's average multiple of 11.24X.Image Source: Zacks Investment Research
View the Zacks #1 Rank List
Image: Bigstock
2 Discounted Microcap Energy Stocks to Buy Amid the Sector Rally
The energy sector has been one of the market's strongest performers this year, largely driven by geopolitical tensions in the Middle East. The Iran conflict, which ultimately resulted in the temporary shutdown of the Strait of Hormuz — a critical artery for global oil shipments — sparked concerns over supply disruptions and pushed crude prices sharply higher.
As energy stocks rallied alongside rising oil prices, bargain opportunities within the sector became increasingly scarce. However, a few names still appear attractively valued despite the industry's impressive run. Against this backdrop, investors may want to consider two micro-cap energy companies — SandRidge Energy, Inc. (SD - Free Report) and PrimeEnergy Resources Corporation (PNRG - Free Report) — which continue to trade at discounted valuations.
Over the past year, shares of SandRidge have advanced 19.1%, whereas PrimeEnergy has returned 17.8%. Both companies have outperformed their subindustry, which gained 13.2% during the same period.
Energy Stocks Benefit From the Oil Rally
The West Texas Intermediate (WTI) crude climbed from just above $70 per barrel a year ago to more than $100 per barrel earlier this year as concerns surrounding the Iran conflict intensified. However, oil prices have recently retreated after reports emerged that the United States and Iran reached a framework agreement aimed at ending hostilities and reopening the Strait of Hormuz. As a result, WTI is currently trading around $75 per barrel.
Even with the recent pullback in crude prices, energy equities have enjoyed a strong year. The sector has generated a year-to-date gain of 24.8%, reflecting investor enthusiasm for companies positioned to benefit from elevated commodity prices.
2 Undervalued Energy Stocks Worth Considering: PNRG & SD
PrimeEnergy: PNRG possesses a sizable number of development opportunities across Texas and Oklahoma, providing the company with a lengthy growth runway. Its ongoing horizontal drilling initiatives in the Midland Basin remain a key focus, supported by a substantial acreage position in West Texas and eastern New Mexico. The company controls 16,838 gross acres (9,420 net acres), primarily concentrated in Reagan, Upton and Martin counties. Management estimates that this acreage could ultimately support 100 additional horizontal wells.
The company's growth visibility extends into the next several years. PrimeEnergy has identified drilling projects for 2026 and 2027 that may require roughly $187 million in capital spending. These opportunities include prospective Wolfcamp "D" development and additional drilling locations throughout Upton and Martin counties. This extensive inventory enables the company to continue building reserves while maintaining flexibility to adapt development activity according to market conditions.
From a valuation standpoint, PrimeEnergy appears inexpensive. The stock currently trades at a trailing 12-month enterprise value-to-EBITDA (EV/EBITDA) multiple of 2.75X, well below the industry average of 11.24X.
Image Source: Zacks Investment Research
SandRidge: The company continues to make progress through its operated Cherokee development program, which remains the company's primary growth driver. Recent operating results suggest that the program's success is extending beyond its initial development phases, providing greater confidence in future production growth.
Operational activity remained active throughout the first quarter of 2026. The company drilled two wells and completed three, while subsequently bringing its ninth operated well into production and continuing work on its 11th well. SandRidge plans to drill 10 operated wells and complete eight during 2026, with two completions expected to carry over into 2027.
Management estimates gross well costs of $9-$11 million and anticipates total capital expenditure between $76 million and $97 million this year. Importantly, approximately 95% of the company's leasehold acreage is held by production, allowing SandRidge to maintain considerable flexibility in rising development activities.
Like PrimeEnergy, SandRidge trades at a meaningful discount to the industry valuation levels. The company's trailing 12-month EV/EBITDA ratio stands at 4.29X, significantly below the broader industry's average multiple of 11.24X.
Image Source: Zacks Investment Research