NEW YORK (TheStreet) -- With oil prices plummeting over the past eight months, many energy companies have taken a hit. Although lower oil prices have actually benefited some in the energy sector, such as refiners, most others have gotten hurt by it.

The energy companies that explore, develop, and drill for oil have suffered the most from low oil prices. Their customers are much bigger oil companies who hire them to explore for oil, but these giants, like ExxonMobil (XOM - Get Report) and ConocoPhillips (COP - Get Report), are reducing their capital expenditure spending due to the declining price of oil, and the slowly sinking-in realization that oil prices may not rise to previous heights any time soon.

Last week we checked TheStreet Ratings, TheStreet's proprietary ratings tool, to find some of the best energy companies to buy. Now, we'll take a look at three energy companies to sell.

TheStreet Ratings projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 32 major data points, TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a "buy" yielded a 16.56% return in 2014, beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a "buy" yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

Check out which three mid-cap energy companies made the list. And when you're done be sure to read about which large-cap pharmaceutical companies to buy now. Year-to-date returns are based on April 29, 2015 closing prices. The highest-rated stock appears last -- read more to see which one is No. 1.

BBG ChartBBG data by YCharts
3. Bill Barrett Corporation (BBG)

Rating: Sell, D
Market Cap: $562 million
Year-to-date return: -1.4%

Bill Barrett Corporation, an independent energy company, acquires, explores for, and develops oil and natural gas resources in the United States.

"We rate BILL BARRETT CORP (BBG) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • BBG's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 58.79%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • Net operating cash flow has significantly decreased to $30.42 million or 55.89% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, BILL BARRETT CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • BILL BARRETT CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, BILL BARRETT CORP turned its bottom line around by earning $0.30 versus -$4.06 in the prior year. For the next year, the market is expecting a contraction of 195.0% in earnings (-$0.29 versus $0.30).
  • BBG, with its very weak revenue results, has greatly underperformed against the industry average of 20.3%. Since the same quarter one year prior, revenues plummeted by 52.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
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ARP ChartARP data by YCharts
2. Atlas Resource Partners L.P. (ARP)
Rating: Sell, D
Market Cap: $792.2 million
Year-to-date return: -14%

Atlas Resource Partners, L.P. operates as an independent developer and producer of natural gas, crude oil, and natural gas liquids in the United States. The company operates in three segments: Gas and Oil Production, Well Construction and Completion, and Other Partnership Management.

"We rate ATLAS RESOURCE PARTNERS LP (ARP) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 1352.1% when compared to the same quarter one year ago, falling from -$40.00 million to -$580.75 million.
  • Currently the debt-to-equity ratio of 1.57 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.47, which clearly demonstrates the inability to cover short-term cash needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ATLAS RESOURCE PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 54.43%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 816.88% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • ATLAS RESOURCE PARTNERS LP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ATLAS RESOURCE PARTNERS LP reported poor results of -$7.79 versus -$1.88 in the prior year. This year, the market expects an improvement in earnings (-$0.70 versus -$7.79).
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NADL ChartNADL data by YCharts
1. North Atlantic Drilling Limited (NADL)

Rating: Sell, E+
Market Cap: $354.5 million
Year-to-date return: -9.8%

North Atlantic Drilling Limited operates as an offshore drilling services contractor in the North Atlantic region. The company provides harsh environment offshore drilling services to the oil and gas industry primarily in Norway and the United Kingdom.

"We rate NORTH ATLANTIC DRILLING LTD (NADL) a SELL. This is based on a variety of negative investment measures, which should drive this stock to significantly underperform the majority of stocks that we rate. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Energy Equipment & Services industry. The net income has significantly decreased by 1098.1% when compared to the same quarter one year ago, falling from $48.10 million to -$480.10 million.
  • The debt-to-equity ratio is very high at 6.08 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, NADL maintains a poor quick ratio of 0.81, which illustrates the inability to avoid short-term cash problems.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Energy Equipment & Services industry and the overall market, NORTH ATLANTIC DRILLING LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $88.60 million or 26.89% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • NORTH ATLANTIC DRILLING LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, NORTH ATLANTIC DRILLING LTD swung to a loss, reporting -$1.38 versus $1.03 in the prior year. This year, the market expects an improvement in earnings ($0.06 versus -$1.38).
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