Oil Prices
Natural gas is flared at Apache Corp.'s Deadwood facility in the Permian Basin near Garden City, Texas, Feb. 5, 2015. Spencer Platt/Getty Images

Amid a steep plunge in oil prices, a small number of energy companies have found a counter-intuitive way to prop up their share prices: by floating more shares. Several companies in the oil and gas industry spurred investor interest by selling more equity in a bid to raise much-needed capital, and along the way their stock has outperformed the sector.

Typically, dividing the ownership of a company into more shares would lessen the value of those shares. However, just the opposite has happened. It turns out investors are searching for energy firms with solid balance sheets amid an industry of companies saddled with debt bordering on default.

"You’d rather own 90 percent of a company with a stronger balance sheet than 100 percent of one with a slightly worse balance sheet," Mike Breard, an energy stock analyst at Dallas-based Hodges Capital Management, told Reuters.

So right now energy companies firming up their treasuries by selling equity are viewed as more likely to survive an onslaught of loan defaults and company restructuring this year. For investors who want a stake in the petroleum business, that's a real draw.

Hodges owns shares in Midland, Texas-based Diamondback Energy Inc. (NASDAQ:FANG) a $5.3 billion onshore oil and gas company that said on Jan. 13 it was selling $226 million worth of shares to pay down debt. The move would typically cause shareholder to wince, because more shares lowers the value of their holdings. Instead, the stock has rallied.

Since Jan. 13, Diamondback’s share price jumped by 32 percent to trade this week at around $77. Over the same period the S&P’s index of the energy sector has risen by nearly 11 percent, which means Diamondback has outpaced the sector’s performance by nearly threefold since mid-January.

Other relatively small oil and gas players have seen similar moves. Oasis Petroleum Inc. (NYSE:OAS), PDC Energy Inc. (NASDAQ:PDCE) and Callon Petroleum Co. (NYSE:CPE) have all outperformed the sector since their latest stock offerings.

Pioneer Natural Resources (NYSE:PXD) stock is up 11 percent since the start of the year (well above the 1.3 percent for the sector) after it shored up its finances. Matador Resources Co. (NYSE:MTDR) and Energen Corp. (NYSE:EGN) are planning to sell assets, but their recent stock offers give them more time to make the best deals.

In all, the energy sector has raised about $10 billion through stock sales since the start of the year, according to Capital One Securities.