6. ITG Investment Research
Focus: big exposure to the "shale promise" stocks
At a conference last week, ITG Investment Research highlighted that a backlog of undrilled shale gas wells, productivity gains in unconventional drilling and the release of associated natural gas from oil drilling rigs is causing a "shadow inventory" equal to roughly 8% of total U.S. natural gas production.
Still, the firm notes Pioneer Natural Resources (PXD - Get Report), EOG Resources (EOG), El Paso (EP), Approach Resources (AREX) and Laredo Petroleum (LPI) as horizontal drillers with the biggest exposure to promising shale's in the Midland Basin.
7. Sterne Agee
Focus: natural gas hedging strategies as the best defensive plays
Focus: oil service stocks have to bottom out at some point, and that point is approaching For those trying to catch a drilling boom instead of an oil or gas commodity price surge, Dahlman Rose analyst James Crandall notes that oil service company stock prices may be approaching "trough valuations" after a 33% drop in the Oil Service Sector Index (OSX) since March 2011. Crandall highlights Baker Hughes (BHI), Haliburton (HAL), National Oilwell Varco (NOV) and Weatherford (WFT) as large cap oil service companies that are attractively valued. For more on oil and gas M&A, see 5 energy deals not to be forgotten in 2012 and Chesapeake Energy's flurry of asset sales. -- Written by Antoine Gara in New York