Encompass Capital Advisors, a hedge fund known for its energy-focused long/short strategy, increased its portfolio value to $2.81 billion in the second quarter of 2026. The firm's 13F filing from August 14, 2026, reveals a continued focus on the energy sector, with significant additions to existing holdings and the initiation of several new positions. The top holdings continue to be TE, SEI, and AESI, with their weights in the portfolio increasing to 11.79%, 7.21%, and 3.86% respectively.
The most notable changes in the portfolio include the establishment of new medium-strength positions in Murphy Oil (MUR), ProPetro Holding (PUMP), and Baker Hughes (BKR). These new stakes, valued at $73.26 million, $65.60 million, and $63.77 million respectively, align with the firm's core energy focus. Encompass also significantly increased its positions in several existing holdings, including a high-strength addition to SEI, where it boosted its share count from 1.75 million to 2.52 million.
Conversely, Encompass Capital exited several positions, with the complete liquidation of its stakes in BTE, ALM, and CEG being the most significant. These high-strength exits suggest a strategic shift away from these specific assets. Additionally, the firm made substantial reductions in other holdings, such as CMB.TECH NV and NAVIGATOR HLDGS LTD, signaling a decreased conviction in these investments. Overall, the Q2 filing portrays an active rebalancing of the portfolio with a reinforced concentration in the energy sector.