With tensions flaring between the US and Iran over the Strait of Hormuz and Brent crude priced at $79.51 per barrel, energy stocks tied to oil and gas production are back in focus for many portfolios. Geopolitical risk, a firmer US dollar and pressure on major stock index futures are reshaping how investors look at this corner of the market. This article walks through three stocks from our Energy Sector Stocks screener that appear closely exposed to the latest headlines, and explains why some investors may see potential opportunity while others might prefer to stay cautious.

Riley Exploration Permian (REPX)

Overview: Riley Exploration Permian is an independent oil and natural gas producer focused on acquiring, drilling, and operating fields in the Permian Basin, with core acreage in Yoakum County, Texas and the Yeso trend in Eddy County, New Mexico.

Operations: Riley Exploration Permian generates its US$403.4 million in revenue from oil and gas exploration and production activities entirely within the United States.

Market Cap: US$718.8 million

Riley Exploration Permian stands out today because it combines direct exposure to higher oil prices with company specific projects that could reshape its earnings mix over time. Investors are watching the New Mexico midstream and ERCOT power initiatives, which aim to turn infrastructure spending into new fee and power sales income, while buybacks and dividends show a focus on returning cash to shareholders. At the same time, the company carries meaningful debt and recently reported a quarterly loss despite higher production. This underlines the execution risk if costs or project timing slip and suggests there is more to unpack beyond the headlines for readers who want to see how these moving parts fit together into a fuller investment case.

Riley Exploration Permian’s push into midstream and power projects could be reshaping its story in ways the headline loss does not fully show. Review the 3 key rewards and 4 important warning signs to see what might be hiding in plain sight.

Ovintiv (OVV)

Overview: Ovintiv is a North American oil and gas producer that explores, develops, and markets oil, natural gas liquids, and natural gas across major shale basins in the Permian and Anadarko in the US and Montney in Canada.

Operations: Ovintiv generates about US$5.7b in revenue from USA Operations and US$3.2b from Canadian Operations, with a smaller US$73 million segment adjustment.

Market Cap: US$15.6b

Ovintiv is closely tied to today’s higher oil price backdrop, with large scale shale production in the Permian and Montney that can be affected when crude and liquids pricing firm up. The company has focused on cost efficiency and marketing agreements that can help steady cash flow, yet investors still have to weigh a recent US$1.7b loss, meaningful debt and an uneven dividend history. Recent buybacks and broker upgrades indicate confidence in the reshaped two basin portfolio. For readers trying to judge whether the current valuation reflects this combination of potential and balance sheet risk, there is still more to unpack beneath the headline numbers.

Ovintiv’s reshaped two basin portfolio and recent buybacks raise the question of what the market might be missing about its balance sheet and cash flow trade offs, so the 4 key rewards and 3 important warning signs could be the missing puzzle piece investors are looking for

Diamondback Energy (FANG)

Overview: Diamondback Energy is an independent US oil and gas producer focused on unconventional shale resources in the Permian Basin, developing large positions in the Spraberry and Wolfcamp formations of the Midland Basin and the Wolfcamp and Bone Spring formations of the Delaware Basin.

Operations: Diamondback Energy generates about US$14.5b in revenue from its upstream operations, all from assets in the United States.

Market Cap: US$51.6b

Diamondback Energy sits at the heart of the US shale story. Rising geopolitical risk around the Strait of Hormuz and firmer Brent prices feed directly into its revenue and cash flow potential. Years of Permian consolidation and efficiency gains support a low cost profile, while planned asset sales and debt reduction could improve financial flexibility and help fund shareholder returns. At the same time, investors have to weigh thinner current profit margins after a large impairment, growing operating costs in the basin and signs that the best drilling locations are becoming scarcer. For readers looking at Diamondback as a way to consider energy security and higher oil price scenarios, there is more beneath the surface than the headline forecasts suggest.

Diamondback Energy’s push to streamline assets, cut debt and lean on a low cost Permian position hints at a story the headline impairment does not fully explain, and the 3 key rewards and 4 important warning signs (1 is major!) may reveal what is quietly reshaping expectations

The three stocks covered here are only a starting point, and the full Energy Sector Stocks (Oil & Gas Producers) screener highlights 21 more companies with equally compelling energy sector narratives that could warrant a closer look. Use Simply Wall St to identify and analyze the specific catalysts, balance sheet traits and project exposures that matter most to you so you can focus on the highest conviction ideas in this corner of the market.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.