Small cap oil stocks are a great way to gain exposure to the energy sector. And all this without having to invest in large, well-established companies. Small cap stocks can be more volatile. But they also have the potential to provide investors with higher returns.

There are many small cap oil stocks trading on Canadian stock exchanges. These companies are involved in a variety of activities. Ranging from exploration and production to transportation and refining.

And these companies have access to some of the most abundant and best quality natural resources. Canada is home to huge oil reserves. And its oil sands are among the largest in the world. These companies are well placed to profit from higher oil prices as well. And the growing demand for energy. So, if you’re looking for the best small cap oil stocks to buy, consider these Canadian companies listed below.

Investors should consider the following factors:

Growth potential

Junior oil companies have more room for growth than their large-cap counterparts. This means they can generate higher returns for shareholders over time.

Financial stability

Small cap oil stocks can be more volatile than large cap stocks. But, it is important to consider the financial stability of the company before investing. Make sure the company has a strong balance sheet and a track record of profitability.

Management team

A company is only as good as its management team. Look for a management team with a proven track record in the oil industry.

If you are looking for small cap oil stocks with high growth potential and strong financials? Consider investing in the following companies. They all have a gross profit margin above 99%. It is therefore very likely that they will increase your investment.

Best Small Cap Oil Stocks to Buy Based in Canada

No. 4 Africa Oil Corp. (OTC: AOIFF)

Market capitalization: 1.1 billion Canadian dollars

If you are particularly interested in small cap oil stocks, you might want to take a closer look at Africa Oil Corp. This small cap oil stock is dedicated to the exploration, development and production of crude oil. And natural gas resources. And some of the company’s major properties are in Kenya and Ethiopia.

Why do I like it? There are several reasons why I like Africa Oil Corp as a small cap oil stock. First of all, the company is well diversified geographically. With operations in Kenya and Ethiopia, this lowers its risk profile. Additionally, their stock price has been rising for the past 12 or so months.

Another key reason to love Africa Oil Corp is its strong balance sheet. The company had strong cash and cash equivalents at the end of 2021. This should give it great financial flexibility to face any short-term challenges.

No. 3 Eco (Atlantic) Oil and Gas Ltd. (OTC: ECAOF)

Market capitalization: 145 million Canadian dollars

Eco Atlantic is a small cap oil company and an oil and gas exploration company. It has assets in Guyana and Namibia. The company’s flagship asset is the Orinduik Block, located offshore Guyana.

The company has a strong debt-free balance sheet and cash reserves in the tens of millions. And Eco has access to a large volume of assets. The Orinduik Block covers an area of ​​3,800 square kilometers. And it is located in the prolific Guyana-Suriname Basin. The block has potential for both shallow-water and deep-water oil discoveries. Eco Atlantic estimates the block could hold up to four billion barrels of oil.

Additionally, they also have an asset in Namibia called Cooper Block. The block covers an area of ​​8,542 square kilometers and is located offshore Namibia. The block has potential for both shallow-water and deep-water oil discoveries.

No. 2 Pulse Seismic Inc. (OTC: PLSDF)

Market capitalization: 113 million Canadian dollars

Pulse Seismic Inc. is a Canadian small cap oil company that provides seismic data to the oil and gas industry. Headquartered in Calgary, Alberta, and founded in 1980. Pulse Seismic is the largest provider of 2D and 3D seismic data in Canada. And it has a library of over 35,000 square kilometers of data.

Pulse also has its unique differentiation. Additionally, this company has a strong debt-free balance sheet and approximately $10.8 million in free cash flow for shareholders at the end of 2021. Pulse Seismic also has a strong track record of profitability. And it has been profitable in each of the past five years.

Pulse Seismic is well positioned to benefit from continued activity in the Canadian oil and gas industry. The company’s seismic data helps oil and gas companies find new reserves. Which leads to more drilling and production. This increases demand for Pulse Seismic services and drives revenue and profit growth.

Pulse Seismic is a small cap oil stock that should be on your radar. And it has a strong balance sheet and track record of profitability. Thus, Pulse Seismic deserves to be considered one of the best small cap oil stocks in Canada.

No. 1 District Mines Ltd. (CVE: DIG.H)

District Mines Ltd. is a small cap oil stock with a market capitalization of $674,000. The Company is engaged in the exploration and production of oil and gas properties in Canada.

The company’s main asset is its interest in the Hinton project. Which covers an area of ​​approximately 10,400 hectares in west-central Alberta. And this small cap oil stock has a 100% working interest in the project. This is great news for investors. Because that means all profits and growth go directly to District. And, more importantly, investors benefit from this growth.

Conclusion of Small Cap Oil Stocks in Canada

The small cap oil stocks discussed above are all worth considering. Especially if you are looking for investment opportunities. Specifically, those in the Canadian oil and gas industry. These companies all have strong balance sheets. Plus, a strong track record of profitability and unique differentiations. So, be sure to research these companies further. Only consider investing in them if they match your investment objectives and risk tolerance.