With oil retreating more than 30% as 2018 approached an end, E&Ps—and especially the less liquid, small/midcap (smid) subset—were under heavy pressure. In addition, E&P stocks in general were tumbling along with the broad selloff in the global equity market.

Such unsettling conditions have typically led investors to focus on larger, more liquid stocks. Moreover, as investors increasingly focus on E&Ps that are generating free cash flow, larger-cap E&Ps are often prioritized over growth-oriented, smaller-cap names.

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