It is true that we must move rapidly to newer, greener technologies to address the challenges on the horizon posed by climate change.
But it’s also true that – in a world where energy demand continues to expand, thanks in part to the heavy needs of the nascent artificial intelligence (AI) industry – the legacy oil and gas sector is not going anywhere just yet.
The sector remains a cornerstone of the global economy, providing essential fuels for transportation, power and the production of petrochemicals used in everyday goods like plastics, rubber and fertilizers.
Despite a global push toward renewable energy and slowing growth in major energy markets like China, the industry's place in developed and developing economies is locked in for the foreseeable future.
The preoccupation of many governments around the world is ensuring reliable baseload electricity and energy sovereignty during uncertain geopolitical times; maintaining data centres and networks, and fuelling technological growth – including the growth of the renewable and green energy sector.
Range of investment options
The sector offers a range of investment options, from pure-play exploration and production (E&P) companies and midstream operators to integrated oil majors that span the entire value chain.
Australia's significant role as a major exporter of coal, gas and oil cements its energy sector's prominence, with many large ASX-listed companies offering relative stability and attractive dividends.
Oil prices remain volatile, with global dynamics such as OPEC+ decisions to cut supply adding uncertainty to the market.
Despite these challenges, industry titans have adapted to thrive throughout cycles, employing strategies like capital discipline, focusing on financial health and transforming business models to address climate change.
Many oil companies are pivoting toward greener operations, balancing traditional fossil fuel production with sustainable initiatives.
Technology and AI, reliant on these fuels for maintenance, are also being deployed to enhance operational efficiency, contributing to the sector's evolution in a rapidly changing energy landscape.
While the energy sector rebounded strongly in 2022 following the pandemic-induced slump, it underperformed in 2023 compared to the broader S&P 500 index. However historical performance highlights the sector’s potential for strong returns during market downturns.
Although identifying strong opportunities in the oil and gas sector can be challenging, a diversified investment portfolio should include exposure to this critical industry.
Here are some oil and gas stocks to watch in 2025:
Buru Energy
In 2024, Buru Energy Ltd (ASX:BRU, OTC:BRNGF) concentrated its efforts on advancing the Rafael Project, which it sees as the foundation for long-term cashflows.
Key achievements included progress in Rafael Project partnerships and gas/liquids offtake negotiations, with commercial agreements targeted for early 2025.
Enhanced subsurface imaging also bolstered confidence in the project’s resource potential, laying the groundwork for planned 2025 activities to optimise well productivity.
The company streamlined its operations by focusing on prime areas within the Canning Basin, surrendering non-core permits to reduce its footprint by 60%.
Additionally, Buru advanced plans to divest subsidiaries 2H Resources and Battmin, with sales expected to conclude in the first quarter of 2025.
With a sharpened strategy and strengthened resource base, Buru enters 2025 well-positioned to finalise commercial agreements, resume Ungani oil production and drive value creation for shareholders.
Brookside Energy
Brookside Energy Ltd (ASX:BRK, OTC:RDFEF) is set to build on the successes of its 2024 operations with a strategic focus on inventory growth and targeted drilling in 2025.
Recognising the challenges posed by softening oil prices in late 2024, the company is enhancing its resilience by acquiring additional high-quality drilling locations in the Anadarko Basin of Oklahoma and prioritising a targeted drilling program over full-field development.
Efforts to expand its inventory are well underway, with Brookside working to secure a fifth Drilling Spacing Unit (DSU) in the SWISH Play area.
This initiative is expected to extend the company's drilling inventory beyond the current four-year plan, leveraging accumulated geological and reservoir data to unlock value in underdeveloped areas.
The 2025 drilling program will include three horizontal wells with 10,000-foot laterals, beginning with the first well spudding in Q1. Two additional wells targeting a new DSU are planned for the third quarter.
Brookside projects net production to grow by 30-40% over 2024 levels, supported by US$18.3 million in capital expenditure and EBITDA forecast at US$18 million, positioning the company for sustainable growth in a challenging market environment.
Empire Energy Group
Empire Energy Group Ltd (ASX:EEG, OTC:EEGUF) closed 2024 with significant progress in its Beetaloo Basin operations while bolstering its financial flexibility.
The company successfully drilled and cased the Carpentaria-5H (C-5H) well to a total depth of 5,310 metres, including a 3,310-metre horizontal section within the Velkerri-B shale.
Strong gas shows were observed throughout, reinforcing the well’s potential as a key asset in Empire’s portfolio.
The drilling was executed efficiently, taking just 41 days from spud to rig release, with production testing and fracture stimulation set to begin in early Q2 2025 after the Northern Territory wet season.
On the financial front, Empire strengthened its liquidity by securing new credit facilities with Macquarie Bank, including a $30 million R&D facility and a $5 million performance bond facility.
Combined with $25.7 million in cash on hand and $28.8 million in undrawn credit, the company is well-positioned to fund upcoming operational activities and growth initiatives.
These achievements set Empire up for a pivotal year in 2025, with the results from the C-5H well and additional production testing expected to play a critical role in advancing the company’s strategy and unlocking further value from the Beetaloo Basin.
Tamboran Resources
Tamboran Resources Corporation (NYSE:TBN, ASX:TBN) marked a major milestone in 2024 with the successful drilling and casing of the Shenandoah South 3H (SS-3H) well in the Beetaloo Basin’s EP 98 exploration permit.
The well reached a measured depth of 21,169 feet (6,452 metres) in just 25 days, a 43% improvement in drilling efficiency compared to the previous SS-2H well.
This achievement highlights the company’s ability to optimise operations by incorporating lessons from earlier wells in its 2024 campaign.
The SS-3H well is the first in the Beetaloo Basin to feature a usable 10,000-foot (3,048-meter) horizontal section below 8,000 feet true vertical depth (TVD) for stimulation, demonstrating strong gas shows and high-quality shale properties throughout the horizontal section.
This progress paves the way for an extensive 100-120-stage stimulation campaign scheduled to commence in early Q1 2025, with additional plans to stimulate the SS-2H ST1 well in up to 45 stages.
Tamboran’s efficient operations and successful well design in 2024 set a strong foundation for 2025, with initial production (IP30) flow test results from both wells expected in the first quarter.
Triangle Energy
Triangle Energy (Global) Ltd, in partnership with Strike Energy and Echelon Resources, made progress in 2024 towards the highly anticipated Becos-1 exploration well in the Perth Basin.
The joint venture achieved near-completion of the well pad, with the Silver City Drilling rig scheduled to arrive in late March 2025 after completing other workovers in the region.
The Becos-1 well will target prospective resources ranging from 1 million barrels (MMbbl) to a high case of 21 MMbbl, with a best estimate of 5 MMbbl and a 20% chance of success.
The primary targets are the Arranoo and Bookara sandstones, expected to be encountered at depths of 700–800 metres, with the potential to intersect the Kingia Formation as an additional reservoir.
Drilling operations are projected to take around 12 days, including a seven-day drilling window.
With strong resource potential and efficient preparation, Triangle Energy is well-positioned to deliver results in early 2025, setting the stage for continued exploration and development opportunities in the Perth Basin.