Oil's Outlook Looks Ugly-That's Why These 3 Energy Plays Matter

Faced with excess supply that is likely to carry over into the new year, crude oil prices are likely to continue to struggle in 2026. The U.S. Energy Information Administration (EIA) expects the supply glut to persist through 2026, which should, in turn, put downward pressure on oil prices—crude oil could fall to $55 per barrel on average for the first quarter.

This is likely to be bad news for stocks in the oil and gas industry in the short term, given the close correlation between their performance and the price of these resources. Investors willing to take a longer view, however, might see an opportunity at some point in the coming quarters to load up on shares of lesser-known energy sector names that present a value play. Of course, there is risk to this strategy—it's always challenging to time the market, and there is no telling whether other factors may continue to depress the price of crude for a longer period, for instance. However, the companies below may interest investors with an appetite for risk and time to wait for energy prices to recover.

Expand Energy Delivers Strong Results Despite Depressed Pricing

Expand Energy Corp. (NASDAQ: EXE) is primarily a liquefied natural gas (LNG) producer rather than an oil company, but there may still be some correlation between the prices of natural gas, oil, and related stocks. For much of the year, the price of natural gas has been sluggish, although there was an improvement in the final months of the year. In any event, EXE shares have underperformed the broader market in 2025, returning just 6.5% year-to-date (YTD) against the S&P 500's 17.2%.

Expand managed to perform well in the latest quarter despite lower natural gas prices, coming in nine cents above analyst earnings per share (EPS) estimates and nearly $1 billion above revenue predictions thanks to expanded production, reduced well costs, and other factors. The company's strategic acquisitions in the Western Haynesville region, including some 75,000 net acres added in the third quarter alone, have been key to boosting productivity and lowering costs.

The company is also prepared to continue to execute even if prices stay down, having reduced gross debt by $1.2 billion last quarter. This may be why analysts expect EPS to more than quadruple in the coming year to $5.48. It's no surprise, then, that 19 out of 22 analysts call EXE a Buy, as the stock is projected to have 20% in upside potential.

Mach's Transition to Natural Gas Going Well, Dividend May Rebound

Oklahoma-based upstream firm Mach Natural Resources LP (NYSE: MNR) experienced a 35% share price decline so far this year, bringing its price-to-earnings (P/E) ratio down to a comparably low 11.75. For investors concerned about stagnating oil prices in 2026, Mach has indicated plans to continue to pivot toward natural gas in the new year. The transition is already well underway, as natural gas production is expected to rise significantly in the final quarter of 2025.

The company has leaned heavily on wells in the Anadarko and Mancos regions in recent periods, but these have fortunately been strong so far, and management expects to trim well costs further in 2026. Like Expand, Mach has also undergone strategic acquisitions that boost its diversification and allow it to scale operations. Though this has put pressure on the company's dividend yield and payout ratio, executives have recently reasserted Mach's commitment to returning value to shareholders. Analysts see a strong prospect here, with shares projected to roughly double to more than $22 each.

Archrock Delivers Strong Dividend Growth as Energy Demand Booms

Houston-based Archrock Inc. (NYSE: AROC) supplies equipment to the oil and gas industry. It has been somewhat insulated from price volatility in the oil and gas spaces, but has still only returned just over 1% YTD. More than anything else, perhaps, this firm is likely to benefit from growing secular demand for energy, and in particular, surging interest in natural gas.

This boost is reflected in the company's earnings of late, including roughly 50% year-over-year improvement to adjusted EPS, excellent fleet utilization, and management's decision to raise adjusted EBITDA guidance for the full year. As an added bonus to investors, Archrock has increased its dividend multiple times in the last year, showing its commitment to continuing to maximize shareholder value.

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