Oil stocks offer some of the best investment opportunities due to black gold’s importance in the global economy. Nevertheless, valuation is always a big issue for investors looking to gain market exposure through some big players.

Penny stocks that cover the oil and gas sector offer some of the best investment opportunities at highly discounted levels for risk-tolerant investors. A significant oil price increase often makes these stocks some of the big gainers offering some of the best investment returns.

Given that oil prices have pulled back significantly from the $100-a-barrel level, most OTC oil stocks are trading at highly discounted levels. Below are some of the plays worth picking up now amid the depressed valuation levels in the sector.

Allied Energy Improving Outlook After Pullback

Allied Energy OrdShs (OTCMKTS: AGYP) has come under immense pressure after oil prices tanked from above the $100 a barrel level to lows of $70 a barrel. While the stock has lost more than 20% in market value year to date, the downward momentum appears to be fading. The stock has started showing signs of bottoming out amid an uptick in upward momentum.

The bounce back in recent weeks comes from the company signing a series of deals expected to strengthen its prospects as an oil and gas company. The company has made a name for itself on leasing and reworking oil as reserves in Texas.

It is also fresh from entering a joint operating agreement with Miller ESP LLC, expected to result in a series of synergies. The deal will result in cost-sharing, mostly touching on equipment purchase or rental maintenance and repairs.

In addition, Allied Energy is expected to benefit from access to a wide range of specialized equipment for enabling effective and efficient operations. Additionally, the company should benefit from the extensive knowledge and experience that Miller brings to the oil industry.

According to Allied Energy CEO George Monteith, the joint operations agreement should result in more uptime and more oil production. The company expects the collaboration to enhance daily production while opening the door for new projects.

In the recent past, Allied Energy entered into a formal gas offtake agreement with Sloan Petroleum as part of an effort to bring a 20-megawatt flare gas bitcoin mining project online. The deal is expected to add a number of natural gas wells with high MCF.

The deal builds on a memorandum of understanding that Allied Energy entered with River Energy Group at the start of the year to develop solutions for Bitcoin mining and High-performance Computing data centers.

The signing of strategic partnerships expected to enhance Allied Energy Ord’s prospect in leasing and reworking oil and gas reserves is the catalyst expected to propel the stock on improved sentiments on Wall Street.

Foothills Exploration Improving Growth Metrics

Foothills Exploration Inc. (OTCMKTS: FTXP) is an independent oil and gas exploration and production company focused on delivering the energy needs of today and tomorrow. While its stock remains subdued amid broader sector sell-offs, its fundamentals paint a completely different picture.

The company delivered impressive quarter results for the year’s first three months. Revenues were up 96% year over year to $499,000. Net loss, on the other hand, shrunk by 28% to $288,000 from $4399,000.

The solid quarterly results came as the company continued to demonstrate significant growth supported by the addition of new producing assets and higher commodity prices. With the world expected to remain oil and natural gas dependent for many years to come, the company has continued to strengthen its portfolio with the acquisition of certain leases and wells in Kansas and Oklahoma.

With the acquisitions, the company secures a valuable multiyear inventory of oils well that should increase its production and reserve profile for many years. Consequently, the company is well-positioned to benefit from an uptick in oil prices that should see the stock bounce back after the recent deep pullback.

88 Energy Ltd Pursuing Growth Opportunities

88 Energy Ltd (OTCMKTS: EEENF) is another highly prospective penny stock offering tremendous exposure to valuable oil and gas projects in the United States. While based in Australia, the company operates exploration interests in Alaska and onshore in Texas.

In Alaska, it has drilled multiple exploration oil wells and acquired extensive seismic data across large acreage positions. Its Phoenix and Icewine West acreage holds significant conventional and prospective resources expected to generate significant shareholder value for many years to come.

The fact that the company continues to pursue growth opportunities and conventional oil and gas to deliver growth and create value for shareholders makes the penny stock an ideal play.

Petrotal Corp Improving Financials

Petrotal Corp (OTCMKTS: PTALF) is another solid OTC oil stock that offers solid exposure to the appraisal development and exploration of oil and natural gas in Latin America. The company’s operations are already bearing fruits after achieving a 17.5% increase in oil production in the first quarter to 12,193 barrels of oil per day. Likewise, the company achieved a record sales volume of 21,500 bopd in the March quarter.

The repayment in full of the company’s corporate bonds worth $ 80 million affirmed the company is on track to become cash positive. Likewise, it paves the way for the company to reintroduce dividend payments and a share buyback program in the second quarter. The company intends to reinstate its $0.015 per share quarterly dividend representing an annualized yield of 10%.