To invest in the energy sector today, you need to have an appetite for risk. But if you can white knuckle it, you can earn big returns, especially in small and midsize energy stocks, which have been particularly beaten down. Consider: Standard & Poor's SmallCap 600 Energy index fell 51.1% from June 2014 to March 2015, when West Texas Intermediate, the U.S. benchmark for oil prices, bottomed at $43 per barrel. But since then, although crude has rebounded to $61.30 per barrel, the SmallCap Energy index has gained just 4.8%. The S&P MidCap 400 Energy index, which dropped 36.3%, has moved up only 6.1%. "This is not typical," says a report by Bank of America Merrill Lynch. In other words, these stocks have some catching up to do.

With that in mind, we've identified eight energy stocks with market capitalizations of roughly $1 billion to $11 billion that show potential for a strong comeback. Most of these stocks have already begun to turn the corner, but they will go higher if oil prices edge up. Meanwhile, all of the companies have relatively low debt levels or are actively paying down debt, which should help them survive any future drops in energy prices.

Carrizo Oil & Gas

Share price: $52.99

Headquarters: Houston

Market capitalization: $2.7 billion

52-week high/low: $31.70 - $70.49

Drilling for oil has become increasingly complicated and expensive, so small energy firms that can keep costs down have an advantage. Carrizo Oil & Gas (CRZO) is one example. The exploration and production concern works 82,000 acres in the Eagle Ford Shale in the southern part of Texas. There, the breakeven cost for producing oil is among the lowest of U.S. shale plays, and analysts at Credit Suisse believe Carrizo can keep costs to $48 per barrel. The company knows its strengths. In the first quarter, Carrizo dedicated 68% of its capital spending to the Eagle Ford.

As with most E&P firms, earnings have taken a hit. Analysts say Carrizo's profits will decline by about half in 2015, to $1.08 per share, then rise to $1.26 in 2016. But the ratio of Carrizo's net debt to its earnings before interest, taxes, depreciation and amortization (a measure of how many years it would take a company to repay its debt) was 2.25 at the end of March. "Anything around 2 or lower is solid," says Bill Costello, an analyst and portfolio manager at Westwood Holdings Group, a money-management firm. That signals that Carrizo, whose debt level is just slightly above the ideal ratio, won't be sunk by debt if oil prices remain low. Investors believe it. The stock has rocketed 67% since hitting its 52-week low of $32 in December.

Diamondback Energy

Share price: $81.43

Headquarters: Midland, Tex.

Market capitalization: $5.1 billion

52-week high/low: $51.69 - $93.33

Diamondback Energy (FANG) works entirely in the Permian Basin in the western part of Texas, another rich shale play. By the end of June, the E&P firm will have a claim on more than 89,000 acres there, following an acquisition announced at the beginning of the year. "The Permian has some of the best economics among U.S. oil fields," says Jim Margard, manager of the Rainier Small/Mid Cap Equity Fund. The oil is flowing, too. Execs at Diamondback estimate that production will rise nearly 54% this year.

At the same time, Diamondback has been reducing costs. The company reports that with oil at about $60 per barrel, it can generate returns comparable to when oil was going for $75 per barrel. Even if oil prices fall, Diamondback is in sound financial shape, with a net debt-to-EBITDA ratio of just 1.3 as of the end of March. The stock has climbed 58% since hitting its 52-week low in December. But Morningstar analyst David Meats believes Diamondback shares have room to run. He pegs the stock's fair value at $91.

Frank's International

Share price: $20.45

Headquarters: Amsterdam

Market capitalization: $3.2 billion

52-week high/low: $14.53 - $25.00

Frank's International (FI) makes the steel casings that are used to protect the wellbore (or hole) when drilling for oil. And while E&P firms have been trimming costs, they cannot compromise on the casings, especially when they are engaged in complex offshore drilling projects. So although analysts believe that earnings at Frank's, which is headquartered in the Netherlands but whose top brass work in Houston, will drop 17% this year, to $0.86 per share, profits are expected to rise slightly next year.

It may be the start of a significant rebound. Shortly after Frank's went public in 2013 at $22, the stock began a gradual decline, eventually hitting $15 at the end of last year as a result of falling oil prices and a competitive onshore drilling market. But the offshore market, which generates the majority of Frank's revenue, looks bright. In the Gulf of Mexico, for example, production is forecast to reach 1.9 million barrels per day in 2016, surpassing a previous high set in 2009, according to Wood Mackenzie, an industry consultant. "Offshore projects are longer term in nature and require billions of dollars in spending," says Rob MacDonald, comanager of the Thornburg Value Fund. "A company won't stop a project that's already in progress." Already, things are looking up. First-quarter revenues jumped 5% from the same period a year ago, and the net debt-to-EBITDA ratio was negative as of the first quarter, which indicates that Frank's has more cash and cash-like investments than debt.

Helmerich & Payne

Share price: $75.12

Headquarters: Tulsa, Okla.

Market capitalization: $8.1 billion

52-week high/low: $54.00 - $118.95

When the price of oil collapsed, so did demand for land rigs. Today, the U.S. land rig count stands at 837, down from 1,787 a year ago. But Thorsten Becker, comanager of the JOHCM U.S. Small Mid Cap Equity Fund, believes the slide is nearing its end. That will benefit Helmerich & Payne (HP). The company makes rigs with some of today's most coveted technology, including the ability to steer through shale underground and drill horizontally. So as E&P firms look to operate more efficiently, Helmerich & Payne's share of the market is expected to grow, starting as early as next year, says Becker.

Meanwhile, Helmerich & Payne still has a backlog of rig orders worth $3.9 billion. The profits from those orders will help support the company's $0.69-per-share quarterly dividend, which at today's stock price equates to a generous 3.7% yield. Moreover, H&P has more cash than debt on its books, providing plenty of support for those dividend payments. The stock has gained 39% since hitting a low of $54 in January, but it remains a long ways from its record peak of $119, reached last July.

Newfield Exploration

Share price: $37.92

Headquarters: The Woodlands, Tex.

Market capitalization: $6.1 billion

52-week high/low: $22.31 - $45.43

SCOOP and STACK may sound like ice cream parlor goodies, but the acronyms refer to two relatively untapped shale plays in Oklahoma where Newfield Exploration (NFX) is focusing its efforts. Top execs say 70% of the company's capital investment will occur in these regions in 2015, and they estimate that production will rise 45% this year. That, along with cost reductions, should help Newfield's earnings recuperate. Analysts expect profits to fall by more than half, to $0.72 per share, in 2015 but to rebound to $1.36 per share in 2016.

Despite declining 7% on February 26, the stock has climbed 70% since bottoming at $22.31 in January. The selloff came on the day Newfield announced the issuance of 22 million new shares, the proceeds from which it used to pay off debt. That helped reduce Newfield's net debt-to-EBITDA ratio from 2.0 at the end of 2014 to 1.8 at the end of the first quarter.

PDC Energy

Share price: $60.11

Headquarters: Denver

Market capitalization: $2.4 billion

52-week high/low: $27.91 - $70.44

With oil prices down, small energy companies must balance the need to boost production with the need to control costs. PDC Energy (PDCE) is doing both. During the first quarter, oil production increased 41% compared with the previous year. The E&P firm is also trimming expenses. For example, in 2015 PDC's costs per well in the Wattenberg Field in Colorado are expected to range from $3.4 million to $4.4 million, down 20% from the previous year. And although small energy companies often use hedges to lock in oil prices, PDC has done more of that than most of its peers. For example, the company has secured an average price of $88 per barrel for 85% of its 2015 oil production. "They have protected themselves well," says Costello, of Westwood Holdings. All of that should help PDC post earnings of $1.61 per share this year, according to analysts' estimates, following a loss last year. Meanwhile, the firm's debt load is manageable. The net debt-to-EBITDA ratio was 2.1 in 2014, and analysts believe the ratio will fall to 1.4 in 2015. The stock has more than doubled since hitting its 52-week low in December, but, says Costello, "there is a lot of room for PDC to run."

Synergy Resources

Share price: $12.16

Headquarters: Platteville, Colo.

Market capitalization: $1.3 billion

52-week high/low: $8.05 - $14.11

With its relatively small market value and low stock price, Synergy Resources (SYRG) may look like one of the riskier bets on this list. And since oil prices began to slip in June 2014, the stock has bounced up and down, from as low as $8 to $14. But despite appearances, the E&P firm is financially sound, thanks to its minimal debt. In fact, Synergy's net debt-to-EBITDA ratio was negative as of the quarter that ended in February. "That puts Synergy in a very good position to accumulate acreage if the company sees some good opportunities," Margard says.

Synergy isn't hesitating. At the end of May, the company added nearly 13,000 acres to its foothold in the Wattenberg Field in Colorado, bringing its total area under production there to about 93,000 acres. Analysts see profits falling 37%, to $0.24 per share in the fiscal year that ends in August, then rising to $0.31 per share for the following 12-month period.

Weatherford International

Share price: $14.37

Headquarters: Baar, Switzerland

Market capitalization: $11.1 billion

52-week high/low: $9.40 - $24.88

If you're willing to take on some added risk--and potentially a higher payoff--then consider Weatherford International (WFT). The oil-field servicer, which is based in Switzerland but has operational headquarters in Houston, has been trying to execute a turnaround, overcoming, among other things, allegations that Weatherford employees bribed foreign officials (which led to a $253 million settlement with the U.S. government in 2013). In November 2013, Weatherford hired Krishna Shivram from competitor Schlumberger to be chief financial officer. The following year, Weatherford sold $1.7 billion in non-core businesses and paid down $1.2 billion in debt. The firm still has a ways to go. For example, Weatherford has 25% more employees per dollar of revenue than its peers, MacDonald estimates. Any cost cutting will improve profit margins, MacDonald says.

The proposed merger between energy-services companies Halliburton and Baker Hughes could drive new business to Weatherford. "Customers want to have more than one supplier, and if two suppliers merge, you have to find another," MacDonald says. "Weatherford will be there." Since hitting a low of $9.40 in January, the stock has risen 53%. Analysts expect that the company will lose seven cents per share this year, but they see profits of $0.41 per share in 2016.

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Carolyn Bigda is a Contributing Writer at Kiplinger's Personal Finance.