3 Small-Cap Stocks Poised for Massive Gains in the Next Decade


  • Gran Tierra Energy (GTE): Attained record reserves, highlighting effective exploration and development strategies.
  • NGL Energy (NGL): Raises asset sale guidance, emphasizing proactive value unlocking and debt reduction.
  • Ring Energy (REI): Delivered consistent production volume growth driven by operational excellence and strategic acquisitions.
  • The focus is optimizing operational edge and strategically managing asset portfolios to derive value growth.
Small-Cap Stocks - 3 Small-Cap Stocks Poised for Massive Gains in the Next Decade

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Within the stock market’s enormous panorama of giants, small-cap stocks sometimes remain hidden and go unnoticed by many investors. But hidden away in this darkness is a treasure mine of unrealized potential, especially in the dynamic energy industry. Today, let’s set out on a quest to find the market’s hidden treasures. Thus, focus on three small-cap firms poised to disrupt the status quo and spearhead advancement.

The first demonstrates the potency of successful exploration and development tactics with its unwavering pursuit of increasing reserves and smart reservoir management. The latter’s proactive strategy for debt reduction and asset monetization highlights its dedication to maximizing value and strengthening its position in the market. On the other hand, the third company’s impressive expansion in production volume and clever portfolio management are prime examples of operational excellence and strategic insight.

Explore the nuances of these small-cap stocks. Lift the veil of mystery to uncover the core qualities of resiliency, creativity, and promise that form their foundation.

Gran Tierra Energy (GTE)

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Gran Tierra Energy (NYSEMKT:GTE) demonstrated the strength of its asset portfolio and reservoir management skills in 2023. The company is reaching milestones in reserve expansion and replacement. With 1P (proven), 2P (proved plus probable), and 3P (proved plus probable plus potential) reserves hitting 90 million barrels of oil equivalent (MMBOE), 147 MMBOE, and 207 MMBOE, respectively, the company announced its greatest year-end total company reserves in history.

Additionally, Gran Tierra’s 1P total company reserves increased for the sixth year in a row in 2023, demonstrating its continued achievement in growing its reserve base. The company can continuously increase reserves, which indicates its successful exploration and development tactics. The company also emphasizes maximizing recovery rates and optimizing reservoir performance.

Gran Tierra also showed solid reserve replacement percentages 2023 for every reserve category. The company has a 1P reserve replacement ratio of 154%, it replaced 154% of its generated reserves throughout the year. Comparably, the replacement ratios for the reserves of 2P and 3P were even higher, coming in at 242% and 303%. All things considered, these strong replacement ratios demonstrate Gran Tierra’s capacity to both maintain and greatly increase its resource base.

NGL Energy (NGL)

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NGL Energy (NYSE:NGL) increased its projection for all asset sales in fiscal 2025 from $100 million to $150 million or more. This highlights the company’s proactive strategy for maximizing the value of non-core assets and fortifying its financials. It also demonstrates the company’s effective implementation of asset monetization techniques to generate funds for strategic initiatives and debt reduction.

Additionally, the company kept operating expenditures at $0.25 per barrel in Q3 fiscal 2024, demonstrating its ability to control costs and maintain industry-leading operational efficiency. Although the adjusted EBITDA for the Water Solutions division decreased somewhat, higher margins and the need for butane blending drove Liquids Logistics’ adjusted EBITDA increase. Notwithstanding obstacles like decreased propane margins due to warmer weather, segment success has mainly been attributed to effective margin management and responsiveness to market dynamics.

Lastly, $18 million to $20 million in working capital was released. This happened when the Grand Mesa Pipeline’s open season ended, and a new shipper with a five-year minimum volume commitment contract was found. Therefore, this working capital release demonstrates how the business may make the most of its infrastructure assets to maximize liquidity and improve its operational edge.

Ring Energy (REI)

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Ring Energy’s (NYSE:REI) capacity to steadily raise production volumes propels its lead in the market. Specifically, there was production volume growth in Q4 2023 compared to Q3. Thus, overall sales volumes rose 11%, resulting in a record-breaking 19,397 barrels of oil equivalent per day (Boe/d).

Based on the total production rise, oil sales volume increased by 13% in Q4 2023 to 13,637 barrels per day (Bo/d) from Q3. Additionally, Ring Energy’s capability to constantly boost production volumes reflects the progressive execution of drilling and completion programs. The company’s focus on optimizing production from existing wells and efficiently bringing new wells online contributes to its solid production volume growth. 

Finally, throughout the previous 18 months, it has effectively integrated two acquisitions, Stronghold Energy II and Founders oil and gas assets, greatly increasing its size, scope, and drilling inventory. Hence, the divestiture of several non-core properties, which left all operational acreage in Texas, reduced operating costs and improved portfolio alignment.

On the date of publication, Yiannis Zourmpanos did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Yiannis Zourmpanos is the founder of Yiazou Capital Research, a stock-market research platform designed to elevate the due diligence process through in-depth business analysis.

Article printed from InvestorPlace Media, https://investorplace.com/2024/03/3-small-cap-stocks-poised-for-massive-gains-in-the-next-decade/.

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