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• EOG Resources (EOG): Is increasing profitability while paying off debt
• Marathon Petroleum (MPC): Is the third-largest crude oil refining company stateside and has a new partnership
• TotalEnergies (TTE): Generates high levels of cash flow, leading to stable dividends

Oil and natural gas prices have reached steep valuations since Russia's invasion of Ukraine in late February. Crude oil is still trading above $100, while natural gas is near its all-time highs above $6. As of April 6, the Dow Jones U.S. Oil & Gas Index is up 57% over the past year and 33% year-to-date (YTD). Analysts believe energy stocks should continue to benefit from the current turmoil.

In early March, the European Union (EU) announced that it would reduce its dependence on Russian fossil fuels far earlier than expected. The EU has pledged to curb its consumption of Russian natural gas by two-thirds by the end of 2022 instead of 2030.

Meanwhile, the International Energy Agency's oil market report for March 2022 highlights, "The prospect of large-scale disruptions to Russian oil production is threatening to create a global oil supply shock." In other words, it is becoming increasingly difficult to find undervalued energy stocks on Wall Street.

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However, there is always an opportunity present for investors who conduct proper due diligence. With that information, here are three undervalued energy stocks that could generate lucrative returns in 2022.

EOG Resources (EOG)

Our first energy stock, EOG Resources (NYSE:EOG), has a market capitalization of close to $70 billion. It is a prominent name in the exploration, production and marketing of crude oil and natural gas. The company has operations in New Mexico and Texas as well as the Republic of Trinidad and Tobago.

Management released fourth-quarter 2021 results on Feb. 24. Revenue surged 104% YOY to $6.04 billion. Net income came in at $1.8 billion, or $3.09 per diluted share, up from $411 million in the prior-year quarter. Cash and equivalents ended the period at $5.2 billion.

Higher oil and natural gas prices and rising production levels fueled top-line growth. Natural gas production rose 8%, with total production increasing 2.2%. As a result, Q4 free cash flow increased 65% quarter-over-quarter to $2 billion. However, rising inflation increased also production costs by 17.5%.

EOG stock has returned 62% over the past year. Shares are now trading at 9.8 times forward earnings and 3.6 times trailing sales. The current share price supports a dividend yield of 2.6%.

Meanwhile, the 12-month median price forecast for EOG stock stands at $140. Interested readers could consider buying into the declines in EOG shares.

Marathon Petroleum (MPC)

Our second name is Marathon Petroleum (NYSE:MPC). It is the third-largest crude oil refining company stateside, with 2.9 million barrels per day of oil refining capacity.

Marathon reported Q4 2021 results on Feb. 2. Revenue jumped 96% YOY to $35.6 billion. Net income came in at $794 million, or $1.30 per diluted share, compared to a net loss of $608 million in the prior-year quarter. Cash and equivalents ended the period at $10.8 billion.

The refiner has recently announced a 50/50 joint venture with Finnish refiner Neste (OTCMKTS:NTOIY). This partnership aims to convert Marathon's California refinery to produce renewable diesel and generate 730 million gallons per year by 2024. Understandably, investors interested in alternative energies were excited about the development.

MPC stock is up 31% YTD. Shares are trading at 18.5 times forward earnings and 0.5 times trailing sales. The 12-month median price forecast for MPC stock is at $89.50.

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In 2021, Marathon returned about $3 billion worth of capital to investors. Meanwhile, the stock generates a 2.7% dividend yield.

TotalEnergies (TTE)

France-based TotalEnergies (NYSE:TTE) is an integrated oil and gas company that explores, produces, and refines oil around the globe.

Management released Q4 2021 results on Feb. 10. Revenue increased 60% YOY to $60.3 billion. Net income came in at $6.8 billion, or $2.55 per diluted share, up from $1.3 billion in the prior-year quarter. Cash and equivalents ended the period at $21.3 billion.

TotalEnergies is increasingly looking at using the funds from its fossil fuel business to transition into clean energy. For instance, in February, it agreed to buy SunPower's (NASDAQ:SPWR) commercial and industrial solutions business for $250 million. The deal allows the oil group to expand into the U.S. and develop more than 100 megawatts of additional capacity per year.

TTE stock has gained 5.8% over the past year. Shares are trading at 5.9 times forward earnings and 0.7 times trailing sales, offering good value.

The 12-month median price forecast for TotalEnergies stock is $64.76. Finally, TTE stock generates a generous dividend yield of 6.1%.

On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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