In this piece, we will take a look at the 15 worst performing energy stocks in 2023. If you want to skip our primer on the energy industry and recent trends, then head on over to 5 Worst Performing Energy Stocks in 2023.
The energy industry is always at the center of global affairs. Humanity's insatiable thirst for progress and economic growth all depends on a well 'oiled' industry supply chain. And as we found out last year, this is a delicate network of supplies that can be disrupted by a global event such as the Russian invasion of Ukraine.
Given Russia's importance in providing oil and gas to Europe, the Ukraine invasion lead to fears of sanctions against Russia and supply constraints, which made investors bet heavily on crude oil. When combined with the lax stimulus policy that was necessitated due to the coronavirus pandemic, this led to record high inflation levels which were driven primarily by high energy prices, especially pump prices for gasoline. To understand the severity of the 2022 inflation crisis, consider the fact that U.S. gasoline prices stood at a whopping $5 a gallon in June 2022 - their highest level since at least 1994. It took nearly six months to reverse this trend as the energy market stabilized and supplies improved.
While for consumers record high prices are nothing but bad news, for businesses they lead to record high profits. These are also translated into dividends for investors that have bought the shares of firms that benefit from these price levels. Naturally, 2022 was a great year for the oil industry and particularly big oil as companies raked in billions of dollars in revenue by selling gasoline at record prices. If you're wondering which firms made the most money during this time period, then the top three were Saudi Arabian Oil Company (TADAWUL:2222.SR), Exxon Mobil Corporation (NYSE:XOM), and Shell plc (NYSE:SHEL). You can check the rest out by taking a look at 12 Most Profitable Oil Stocks in the World.
2023 though appears to be the time for correction in the energy sector. Starting from the share prices of the oil majors, Exxon Mobil Corporation (NYSE:XOM)'s share price is flat year to date, TotalEnergies SE (NYSE:TTE) is down by 0.54%, Chevron Corporation (NYSE:CVX) has bled a sizeable 7.99% so far, and the only firm among these whose shares are actually in positive territory in 2023 is Shell plc (NYSE:SHEL) whose stock has gained 9.86% on the market so far. Profits are falling for big oil as well, with both Shell and Total missing their earnings estimates for the second quarter and reporting annual net income drops of 56% and 49%, respectively. Some factors that influenced the latest results include a sharp tick in Chinese exports, Russia being able to find buyers for its oil and less uncertainty about potential oil supply tightness amidst a weakening global economic outlook.
So how has a weaker global economic environment for energy companies affected their share price? Well, the fallout hasn't been as severe as say in the regional banking sector. The S&P 500 Energy stock index is down by a hairline of 1.19% year to date and is still up by 19% over the past twelve months. Similarly, the S&P Global 1200 Energy is flat year to date and has gained 14.70% over the year.
As to what the oil companies experienced during the second quarter, here's what the management of TotalEnergies SE (NYSE:TTE) had to say during the firm's second quarter of 2023 earnings call:
The commodity environment softened in the second quarter but still at high levels. Quarter-over-quarter, Brent was down 4% to $78 per barrel and Ermengas dropped by around 35% to $10.5 per million. In this context, Total Energy reported second quarter adjusted net income of $5 billion, a decrease of only 24% quarter-over-quarter and was able to generate a $8.5 billion of cash flow. Over the first half ’23, adjusted net income was €11.5 million, and cash flow was $18 billion. We continued to deliver excellent profitability reporting the 22% rate for the 12 months ended June 23, and we continue to share our success with our shareholders as explained by Patti.
With these details in mind, let's take a look at the worst performing energy stocks this year, with the worst offenders being Recon Technology, Ltd. (NASDAQ:RCON), Enservco Corporation (NYSE:ENSV), and Trio Petroleum Corp. (NYSE:TPET).
15 Worst Performing Energy Stocks in 2023
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Our Methodology
To make our list of the worst performing energy stocks, we ranked all energy companies in terms of their year to date share price losses. We then picked the top 15 of these stocks in terms of share price losses.
NCS Multistage Holdings, Inc. (NASDAQ:NCSM) is a small backend oil company that provides well completion products and other equipment to oil companies. As U.S. oil production slows down this year, the firm is also facing a slow market with its revenue dropping during the second quarter.
By the end of Q1 2023, one of the 943 hedge funds part of Insider Monkey's database had held a stake in NCS Multistage Holdings, Inc. (NASDAQ:NCSM). This lone investor is Jim Simons' Renaissance Technologies with a $219,000 stake.
Along with Enservco Corporation (NYSE:ENSV), Recon Technology, Ltd. (NASDAQ:RCON), and Trio Petroleum Corp. (NYSE:TPET), NCS Multistage Holdings, Inc. (NASDAQ:NCSM) is one of the worst performing energy stocks in 2023.
San Juan Basin Royalty Trust (NYSE:SJT) is a trust that owns royalty interest in more than a hundred thousand acres of oil sites in New Mexico. Its cash distribution per unit, which is the share in profits that investors get, peaked in March and has been on a downward spiral since then.
Three of the 943 hedge funds profiled by Insider Monkey for their March quarter of 2023 shareholdings had held the firm's shares. San Juan Basin Royalty Trust (NYSE:SJT)'s largest hedge fund investor is Ryan Tolkin (Cio)'s Schonfeld Strategic Advisors with a $1.3 million investment.
13. KLX Energy Services Holdings, Inc. (NASDAQ:KLXE)
Year To Date Share Price Losses: 27.5%
KLX Energy Services Holdings, Inc. (NASDAQ:KLXE) is another oil production equipment firm with customers in several regions of the U.S. It met analyst EPS estimates for its first quarter earnings, and the stock is rated Buy on average.
After digging through 943 hedge fund portfolios for this year's first quarter, Insider Monkey discovered that 12 had invested in KLX Energy Services Holdings, Inc. (NASDAQ:KLXE). Jeffrey Gendell's Tontine Asset Management is the largest shareholder among these, due to a stake worth $12.2 million.
GeoPark Limited (NYSE:GPRK) is a Colombian oil production company with operations in different countries in the region. The firm's second quarter production is down by 6% annually, with large drops in Chile and Brazil in particular.
Insider Monkey took a look at 943 hedge fund holdings for 2023's first quarter and discovered that 11 had owned a stake in the company. GeoPark Limited (NYSE:GPRK)'s biggest hedge fund stakeholder in our database is Jim Simons' Renaissance Technologies since it owns 3 million shares that are worth $34 million.
HighPeak Energy, Inc. (NASDAQ:HPK) explores and produces oil and gas in Texas and New Mexico. It's been having a tough time so far, having missed analyst EPS estimates in all of its four latest quarters. However, the 2022 oil boom has served it well, as Q2 2023 sales volumes were up a strong 92% annually.
As of Q1 2023 end, eight of the 943 hedge funds part of Insider Monkey's database had invested in HighPeak Energy, Inc. (NASDAQ:HPK). Out of these, the largest investor is Matthew Halbower's Pentwater Capital Management with a $16.6 million stake.
BP Prudhoe Bay Royalty Trust (NYSE:BPT) is an energy trust with properties in Alaska. While its shares rose in January after it announced a royalty payment, they dipped in April when no payment was announced.
As of March 2023, three of the 943 hedge funds surveyed by Insider Monkey had bought the firm's shares. BP Prudhoe Bay Royalty Trust (NYSE:BPT)'s largest shareholder is John Overdeck and David Siegel's Two Sigma Advisors with a $143,632 stake.
ProFrac Holding Corp. (NASDAQ:ACDC) manufactures oil production equipment such as valves, pumps, and piping. It also provides other services to oil and gas companies. Even as U.S. oil production has slowed down, the firm has beaten analyst EPS estimates in all of its four latest quarterly results.
During this year's first quarter, ten of the 943 hedge funds part of Insider Monkey's database had bought a stake in ProFrac Holding Corp. (NASDAQ:ACDC).
Icahn Enterprises L.P. (NASDAQ:IEP) has seen its shares tank this year due to a short seller report from Hindenburg Research. The firm refines and sells petroleum products, but its other business divisions insulate it against downswings in a particular industry.
Only three of the 943 hedge funds part of Insider Monkey's March quarter of 2023 research had invested in the firm. Carl Icahn's Icahn Capital LP is Icahn Enterprises L.P. (NASDAQ:IEP)'s largest investor through a stake worth $15.5 million.
7. Drilling Tools International Corp. (NASDAQ:DTI)
Year To Date Share Price Losses: 57.12%
Drilling Tools International Corp. (NASDAQ:DTI) is a relatively new listing on the stock market, as its shares started trading in June after a SPAC merger. However, the market hasn't been kind, and the stock is down 57.12% year to date from the SPAC's share value in January. Since it is a new listing, no hedge fund part of Insider Monkey's database had bought its shares during 2023's first quarter.
Camber Energy, Inc. (NYSE:CEI) is an American company that provides products and services to firms in the oil exploration sector. The firm expanded its operational portfolio in August after acquiring a clean energy and waste treatment company.
Two of the 943 hedge funds part of Insider Monkey's Q1 2023 database had invested in Camber Energy, Inc. (NYSE:CEI). It joins Recon Technology, Ltd. (NASDAQ:RCON), Enservco Corporation (NYSE:ENSV), and Trio Petroleum Corp. (NYSE:TPET) in our list of 2023's worst performing energy stocks.
