3 Mid-Cap Energy Firms Analysts See Moving Up to the Big Leagues

Key Points

• Energy sector companies have struggled with geopolitical turmoil, a shift away from fossil fuels in some markets, and advances in renewables, making the sector ripe for a shake-up.
• Analysts see several smaller firms as poised for big growth due to their strong financial and operational positions.
• Three such companies include Crescent Energy, Matador Resources, and Northern Oil and Gas.

Among the worst-performing portions of the market of 2025, the energy sector may be ripe for a shake-up. Demand growth for some energy products is slowing while many investors seek to divest their holdings from fossil fuels, prompting companies to reduce their exploration budgets.

Advances in renewables throughout much of the world have also threatened to upend some traditional energy outfits, while developments in battery tech have opened up the space to new participants.

But the single biggest reason the energy sector may be in the midst of a radical transformation is ongoing and deepening geopolitical conflict, including in some of the world's major fossil fuel hubs like the Middle East and Venezuela.

With no signs that many of these conflicts will resolve in the near term, analysts have their eyes on a number of mid-size energy outfits that could have the potential to grow into major players in the space.

Small Oil and Gas Firm That's Doing Everything Right

Crescent Energy Co. NYSE: CRGY is substantially smaller than the current leaders in the oil and gas space, with a market capitalization of just over $2 billion. As such, the company must allocate its resources and operations carefully to focus on sustainable cash flow generation.

It achieves this through high-quality reservoirs, disciplined capital efficiency, and a balance of undeveloped properties and those with preexisting infrastructure.

The strategy is paying off: Crescent beat EPS estimates by 20 cents per share for the year's second quarter, and revenue topped predictions by nearly $30 million, all thanks to record production of 263 kboe/d.

With the massive costs associated with oil and gas exploration and production, Crescent has succeeded in achieving substantial cash flow generation. The firm noted $171 million in free cash flow for the latest quarter, while simultaneously lowering its operational costs at two of its largest mines.

Crescent is focused on the nutrient-rich Permian Basin, a region likely to benefit from favorable regulation in the current political climate of the United States.

Investors bring a sense of optimism to the company—short interest has fallen by more than 7% in the last month alone. Further, analysts also expect big things, as 10 out of 14 rate CRGY a Buy and shares have predicted upside of more than 94%.

Upstream Firm Sees Success in Midstream Expansion

Like Crescent above, Matador Resources Co. NYSE: MTDR is an oil and gas firm focusing on Permian Basin resources and a small size (under $6 billion in market cap). However, Matador's unique focus on upstream operations sets it apart from some of its competitors in the sector.

Matador's production has been surging, climbing by 31% year-over-year (YOY) in the latest quarter. The result is top- and bottom-line earnings wins, record free cash flow, and increased full-year guidance, all of which bode well for the company.

Cost reductions are an additional win that has helped to drive modest stock gains of close to 5% in the last six months.

Matador is also expanding its operations through increased efforts in the midstream area that bridges production and exploration with refining and distribution. Its San Mateo midstream operation has significantly increased its processing capacity recently and achieved an impressive 99% uptime in the last quarter.

Analysts see Matador's success continuing. 14 out of 16 rate the stock as a Buy, and the consensus price target suggests about 43% in upside potential.

Growing Operations Fuel Northern's Strong Financial Performance

Northern Oil and Gas Inc. NYSE: NOG is another oil and gas exploration and production firm operating in the Williston Basin in the north-central United States and parts of Canada.

A strong earnings beat and 26% YOY revenue growth signaled a strong second quarter, as the firm posted solid free cash flow of $126 million and boosted its net wells in process by 70% sequentially.

Northern is also rapidly growing its base of operations, having closed on some 2,600 net acres and 4.8 net wells in the latest quarter.

With strong cost discipline and excess cash available, the company should have room to continue this expansion.

Six out of 11 analysts view NOG shares as a Buy, and Northern could see upside of 49% based on price estimates.