In this article we will take a look at ten cheap oil and gas stocks with high upside potential.
Oil prices are at a critical turning point, and investors are paying close attention. As OPEC+ prepares to announce a major production decision this weekend, the entire energy sector could be on the verge of a major shift. According to Bloomberg, Brent crude is hovering below $67 a barrel, while WTI trades around $65 as of July 1, marking the lowest levels since early June. The spotlight is on Saudi Arabia, which is expected to push for a fourth consecutive monthly output increase in a bid to reclaim its global market share.
But there’s more to the story than just production quotas. Reuters recently reported that Saudi Aramco, the world’s largest oil exporter, is likely to raise its official selling prices (OSP) for August crude shipments to Asia, potentially reaching the highest levels in four months. That’s no small move. After a brief spike triggered by the Iran Israel conflict and robust summer demand, refiners across Asia are scrambling to secure more term supplies. This price momentum could signal renewed profitability for upstream oil and gas players, especially those trading at low valuation multiples.
And it’s not just oil heating up. The global natural gas market is seeing its own fireworks. As Europe races to fill its storage ahead of winter, Reuters reports LNG imports have jumped 21.6% in the first half of 2025 alone. Asia, on the other hand, is stepping back as spot prices soar past affordability. This supply tug of war is keeping prices elevated and creating golden opportunities for well positioned energy companies across the value chain.
Amid these powerful global trends, some oil and gas stocks remain surprisingly cheap, trading at low forward P/E ratios, offering strong free cash flows, and benefiting from rising demand. While many investors chase tech stocks, savvy energy investors are quietly loading up on undervalued oil and gas plays that could deliver big in the coming quarters.
In this article, we have screened and handpicked 10 cheap oil and gas stocks with high upside potential, based on solid fundamentals and favorable market dynamics. Whether you're a long term investor or looking for a tactical energy trade, these companies offer exposure to one of 2025 most promising comeback stories.
Let’s dive into the list, and explore which energy stocks might power up your portfolio next.
Quick Summary:
Looking for undervalued oil and gas stocks in 2025? We have listed 10 companies with a forward P/E below 15, positive YTD returns, and $2B+ market cap. Each stock also has a higher average analyst target price, indicating strong upside potential.
Our approach to determining the cheap oil and gas stocks with high upside potential
To find the ten undervalued oil and gas stocks with high upside potential, we screened for companies with a forward P/E ratio below 15, a market cap over $2 billion as of June 30, and positive year to date performance. We also required that the average analyst target price be higher than the current stock price, indicating potential upside. These criteria helped us identify undervalued yet fundamentally strong stocks. The final list is ranked based on the percentage upside from the current price to the average analyst target price.
10 Cheap Oil and Gas Stocks with High Upside Potential
10. Hess Midstream LP (NYSE:HESM)
Upside Potential: 14%
Forward P/E as of June 30: 11.82
YTD Performance as of June 30: 4%
Hess Midstream LP (NYSE:HESM) is making a solid case as one of the ten cheap oil and gas stocks with high upside potential in 2025. The company owns and operates vital midstream infrastructure across three key segments: Gathering, Processing & Storage, and Terminaling & Export, serving both Hess Corporation and third party producers.
In Q1 2025, Hess Midstream LP (NYSE:HESM) demonstrated resilience despite harsh winter conditions, reporting solid throughput volumes: 424 million cubic feet per day of natural gas, 125,000 barrels per day of crude oil, and 126,000 barrels per day of water. While slightly lower than Q4 due to weather related disruptions, a strong rebound in March and robust third party volumes helped stabilize performance.
Financially, the company remains rock solid. Q1 net income came in at $161 million, and adjusted EBITDA totaled $292 million, with an impressive 80% EBITDA margin, well above its 75% target. Capital expenditures were $50 million, and free cash flow hit $191 million, underlining strong operational efficiency and disciplined spending.
Even more appealing is Hess Midstream LP (NYSE:HESM) commitment to rewarding shareholders. Since 2021, it has returned nearly $2 billion via share repurchases and consistently grown its distribution, which is targeted to increase by at least 5% annually through 2027. Backed by long term contracts with minimum volume commitments (MVCs), the company’s cash flows are stable and not directly tied to volatile oil prices.
With low leverage around 3.1x EBITDA, ample financial flexibility, and a clear path for distribution and volume growth, HESM is a compelling pick for income focused investors seeking undervalued oil and gas stocks with steady upside potential.
09. Plains All American Pipeline, L.P. (NASDAQ:PAA)
Upside Potential: 15%
Forward P/E as of June 30: 12.22
YTD Performance as of June 30: 7.26%
If you're looking for an energy stock that combines stability, upside potential, and income, Plains All American Pipeline, L.P. (NASDAQ:PAA) should definitely be on your radar. It might not grab headlines like oil drillers or tech giants, but this midstream gem is quietly doing all the right things, and that’s exactly why it’s included in our list.
Yes, the company slightly missed Q1 earnings estimates, reporting $0.39 EPS vs. $0.43 expected, but the bigger picture looks far more impressive. Plains delivered $754 million in adjusted EBITDA, with $559 million coming from its Crude Oil segment and $189 million from Natural Gas Liquids (NGLs). While extreme winter weather briefly impacted volumes, the company bounced back quickly with stronger performance in April and May.
Here’s where it gets interesting: around 80% of its NGL sales are hedged for 2025, making its cash flows highly predictable even if oil prices stay choppy. Plains is also pushing toward more fee based revenue, which means more stability and less exposure to commodity swings.
The company is aggressively expanding too, snapping up the rest of the Cheyenne Pipeline and acquiring Black Knight Midstream in the Permian. These “bolt on” deals may sound low key, but they’re adding real value and long term connectivity.
With a rock solid balance sheet, low leverage, and $1.1 billion in projected free cash flow this year, Plains All American Pipeline, L.P. (NASDAQ:PAA) has the financial muscle to keep rewarding investors through buybacks and distributions. It’s a smart, steady pick in a volatile market, and it's still trading at a bargain.
08. Antero Resources Corporation (NYSE:AR)
Upside Potential: 15%
Forward P/E as of June 30: 9.8
YTD Performance as of June 30: 14.92%
Antero Resources is a natural gas company that’s quietly becoming a strong investment pick in 2025. It’s one of the top stocks on our list, thanks to its smart operations, strong cash flow, and future growth opportunities.
In the first quarter of 2025, Antero Resources Corporation (NYSE:AR) produced 3.4 billion cubic feet of natural gas equivalent per day, while keeping spending low. It only used $157 million for drilling and completion, just 23% of its yearly budget. Even with this lean spending, Antero generated $337 million in free cash flow. The company used this to buy back $92 million worth of its own stock and paid down over $200 million in debt.
One of the key reasons Antero Resources Corporation (NYSE:AR) stands out is its low cost of operation. It needs just $0.54 per Mcfe to maintain production, making it one of the most efficient in the industry. Its breakeven price is $2.29 per Mcf, meaning it stays profitable even when gas prices fall.
Antero is also improving how it drills. It recently hit a record with 18 completion stages in one day, showing it can produce more using fewer resources. On top of that, its natural gas liquids (NGL) business is strong, earning $1.50 to $2.50 more per barrel than average prices.
With solid financials, growing demand from power plants and data centers, and low debt, Antero is well positioned for growth, and still trading at an attractive price.
07. BKV Corporation (NYSE:BKV)
Upside Potential: 16%
Forward P/E as of June 30: 11.06
YTD Performance as of June 30: 1.43%
BKV Corporation (NYSE:BKV) is a U.S. based natural gas company operating in Texas and Pennsylvania. It’s quickly becoming a strong player in the energy sector, and its recent earnings show that it has plenty of upside.
In Q1 2025, BKV reported a net loss of $79 million, but the bigger picture is much more positive. The company earned $35 million in adjusted income and reported over $100 million in adjusted EBITDAX, with $90 million coming from its natural gas business and $10 million from power operations. Daily production stood at a solid 761 million cubic feet equivalent, and BKV maintained a low debt ratio, less than 0.7x net debt to EBITDAX.
BKV kept spending under control with capital expenses of just $58 million, well below its budget. It also generated $6 million in free cash flow, or $22 million excluding certain payments. Around 58% of its natural gas is hedged for 2025 at $3.44 per MMBTU, which helps protect earnings from market swings.
What makes BKV stand out is its future ready strategy. The company is investing in carbon capture technology, which is getting government support and will help meet clean energy goals. It also has power partnerships in Texas, positioned to benefit from rising electricity demand, especially from data centers.
Overall, BKV is an affordable energy stock with strong operations, smart investments, and big potential for long term growth.
06. Suncor Energy Inc. (NYSE:SU)
Upside Potential: 17%
Forward P/E as of June 30: 12.88
YTD Performance as of June 30: 4.96%
Suncor Energy Inc. (NYSE:SU) is one of Canada’s leading integrated energy companies, operating across the oil sands, refining, and international exploration. Its strong start to 2025 proves it’s not just surviving in a tough market, it’s thriving.
In Q1 2025, Suncor delivered record breaking results across multiple segments. Upstream oil production hit 853,000 barrels per day, marking its best ever first quarter. Refining throughput also reached an all time Q1 high of 483,000 barrels per day, with utilization exceeding 100% at most facilities. Despite inflation and market headwinds, Suncor stayed efficient. It cut operating costs by 4.2% compared to last year, even while increasing production and sales. That’s impressive cost discipline. The company also reported $3 billion in adjusted funds from operations and $1.6 billion in adjusted operating earnings, translating to $2.46 and $1.31 per share, respectively.
Thanks to a lean balance sheet, Suncor Energy Inc. (NYSE:SU) net debt fell to $7.6 billion, well within its target range. The company returned nearly $1.5 billion to shareholders through dividends and stock buybacks in Q1 alone.
Looking ahead, Suncor is continuing to invest in performance and productivity. Its expansion of autonomous trucks, refining upgrades, and new equipment at Fort Hills highlight its forward thinking approach to driving efficiency.
For value focused investors, Suncor combines strong fundamentals, consistent cash flow, and shareholder friendly policies. It’s one of the most compelling cheap oil and gas stocks with high upside potential heading into the rest of 2025.
05. Canadian Natural Resources Limited (NYSE:CNQ)
Upside Potential: 19%
Forward P/E as of June 30: 13.28
YTD Performance as of June 30: 1.72%
Canadian Natural Resources Limited (NYSE:CNQ) is one of the largest independent crude oil and natural gas producers in Canada, with operations spanning Western Canada, the North Sea, and offshore Africa. With its focus on long life, low decline assets, CNQ is built for stability, and 2025 is off to a stellar start.
In Q1 2025, CNQ reported record total production of 1.58 million barrels of oil equivalent per day, including over 1.17 million barrels per day of liquids and 2.45 BCF of natural gas per day. Its oil sands segment delivered standout performance, with synthetic crude oil (SCO) production at an all time high of 595,000 barrels per day and upgrade utilization hitting 106%. Thanks to cost efficient operations, SCO production costs averaged just $21.88 per barrel, among the lowest in the industry.
Financially, Canadian Natural Resources Limited (NYSE:CNQ) crushed estimates with EPS of $0.81, beating the expected $0.73. The company generated $4.5 billion in adjusted funds from operations and $2.4 billion in net earnings, while reducing net debt by $1.4 billion. Shareholders were rewarded with $1.7 billion in returns, including a 4% dividend increase, the company’s 25th consecutive year of dividend hikes.
With a WTI breakeven in the low to mid $40 range, Canadian Natural remains profitable even in lower price environments. It continues to reinvest efficiently while expanding high margin assets like the Duvernay play and optimizing production across thermal and conventional operations.
For investors seeking a reliable, low cost energy stock with strong upside, Canadian Natural Resources Limited (NYSE:CNQ) checks all the boxes, making it a standout pick in our list of ten cheap oil and gas stocks with high upside potential.
04. TotalEnergies SE (NYSE:TTE)
Upside Potential: 19%
Forward P/E as of June 30: 8.17
YTD Performance as of June 30: 12.64%
TotalEnergies SE (NYSE:TTE), a global multi energy leader based in France, is involved in everything from oil and gas to renewables, hydrogen, and power generation. Despite missing Q1 2025 EPS expectations slightly at $1.83 versus the anticipated $1.88, the company showcased strong fundamentals that make it a compelling long term investment, especially for value focused investors.
In a complex macro environment, TotalEnergies SE (NYSE:TTE) delivered $4.2 billion in adjusted net income and $7 billion in funds from operations (FFO) in the first quarter. Production surged to 2.56 million barrels of oil equivalent per day, up nearly 4% year over year, driven by ramp ups in Brazil, the U.S., and Malaysia. Importantly, the company maintained operating costs at just $4.90 per barrel, underscoring its efficiency even amid global inflationary pressures.
The company’s integrated structure adds resilience. Its LNG division generated $1.3 billion in operating income, while its power segment contributed another $500 million, reflecting the success of its energy transition strategy. With further developments in offshore oil fields like Ballymore (U.S.) and Mero 4 (Brazil), production and cash flow are expected to rise throughout 2025.
Despite softer oil prices and refining margins, TotalEnergies SE (NYSE:TTE) rewarded shareholders with a 7.6% dividend increase and $2 billion in Q1 share buybacks, reinforcing its commitment to capital returns. Gearing remained low at 14.3%, highlighting financial strength.
With a balanced portfolio, global reach, and top tier operational efficiency, TotalEnergies stands out as one of the ten cheap oil and gas stocks with high upside potential.
03. Sunoco LP (NYSE:SUN)
Upside Potential: 21%
Forward P/E as of June 30: 9.5
YTD Performance as of June 30: 4.18%
Sunoco LP (NYSE:SUN) is a major U.S. company that distributes fuel and operates key energy infrastructure. Even though the company missed earnings expectations in Q1 2025 (earning $1.21 per share vs. $1.69 expected), the overall performance was strong and shows why this stock has solid long term potential.
In Q1, Sunoco LP (NYSE:SUN) earned $458 million in adjusted EBITDA and $310 million in distributable cash flow. These numbers show the company continues to generate healthy profits. It also improved its financial position by raising $1 billion in new financing, paying off old debt, and keeping its balance sheet strong with zero borrowings on its $1.5 billion credit line.
The Fuel Distribution business brought in $220 million in earnings, and fuel volumes stayed steady despite tough market conditions. Sunoco’s terminals business saw big growth, jumping to $66 million in EBITDA, up from $24 million last year, thanks to higher fuel throughput.
What really makes Sunoco LP (NYSE:SUN) exciting is its global expansion. It just announced two major deals: a $9.1 billion acquisition of Parkland Corporation and a €500 million deal to buy TanQuid, Germany’s largest independent fuel storage company. These moves will boost Sunoco’s international presence and long term cash flow.
The company also raised its quarterly dividend to $0.8976 per share, showing strong commitment to rewarding investors. With steady earnings, smart acquisitions, and growing dividends, Sunoco LP is an undervalued oil stock with big upside potential in 2025.
02. Ultrapar Participações S.A. (NYSE:UGP)
Upside Potential: 24%
Forward P/E as of June 30: 9.27
YTD Performance as of June 30: 24.71%
Ultrapar Participações S.A. (NYSE:UGP) is a major Brazilian energy company involved in everything from selling fuel and LPG to running convenience stores and storage terminals. It even offers digital payment solutions. While the market in Brazil has been tricky, Ultrapar’s recent performance shows it’s a strong and smart player with room to grow.
In the first quarter of 2025, Ultrapar reported BRL 1.18 billion in recurring EBITDA, and BRL 502 million in net income. While earnings dipped slightly due to a loss in its waterway transport unit (Hidrovias), the company kept its finances solid. It raised BRL 1.4 billion in new debt at a low interest rate and increased its stake in Hidrovias, showing strong confidence in future growth.
One of the biggest highlights was Ultrapar’s fuel distribution arm, Ipiranga, which delivered BRL 826 million in profit, up 6% from last year. This came from better margins on fuel and smarter inventory management, even with some challenges in Brazil’s fuel market.
Ultragaz, the LPG business, also saw a 1% increase in volumes, while Ultracargo, the storage terminal business, posted steady growth with BRL 166 million in EBITDA.
What makes Ultrapar Participações S.A. (NYSE:UGP) stand out is its smart strategy , cutting weaker parts of the business, investing in high potential segments, and keeping costs in check.
With improving regulations, strong leadership, and smart investments, Ultrapar is one of the best cheap oil and gas stocks to watch in 2025. It is in a good shape for growth, and flying under the radar.
01. Frontline plc (NYSE:FRO)
Upside Potential: 52%
Forward P/E as of June 30: 5.38
YTD Performance as of June 30: 15.64%
Frontline plc (NYSE:FRO), a global leader in oil transportation, operates a fleet of 81 modern tankers, including VLCCs, Suezmax, and LR2 vessels. Based in Cyprus, the company plays a key role in global crude oil logistics , and it might just be one of the smartest oil stocks to watch right now.
In Q1 2025, Frontline posted adjusted earnings of $0.18 per share, with a net profit of $33.3 million. While earnings were slightly below expectations due to lower time charter rates, the company still generated strong cash flows. Frontline’s fleet pulled in impressive average daily earnings of $37,200 for VLCCs, $31,200 for Suezmax, and $22,300 for LR2s, with bookings for Q2 showing a sharp rise , a positive sign for near term growth.
What really sets Frontline plc (NYSE:FRO) apart is its lean operating model and healthy balance sheet. The company boasts over $800 million in liquidity, no significant debt maturities until 2030, and zero exposure to expensive newbuild projects. Its fleet is young (average age under 7 years), eco friendly, and mostly equipped with fuel saving scrubbers , a major advantage as shipping regulations tighten.
Frontline also benefits from global dynamics. As sanctions tighten and old ships get phased out, demand is rising for modern, compliant vessels like those in Frontline’s fleet. If geopolitical disruptions continue or oil supply expands as expected, Frontline is poised to capture higher shipping rates and deliver robust earnings.
Bottom line: With a solid fleet, strong financials, and favorable market trends, Frontline plc (NYSE:FRO) is a cheap oil stock with serious long term potential.
Read Next: