This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

9 Oil Stocks With Hot Prospects

BOSTON (TheStreet) -- The continued growth of oil-shale drilling in North America and a big rebound in offshore drilling in the Gulf of Mexico has boosted the long-term investment prospects for the oil and gas industry's suppliers.

Standard & Poor's outlook for the oil and gas equipment and services industry for the next 12 months is "positive" as it notes that there are now 31 offshore deep-water drilling rigs operating in the Gulf of Mexico now, a 94% rebound in the two years since the BP (BP) offshore oil rig explosion and leak of April 2010 prompted a moratorium on new drilling. S&P expects the number of rigs operating there will exceed pre-disaster levels by year-end, which means significantly more demand for contractor services.

And that, coupled with the continued growth of oil-shale exploration throughout North America and internationally, adds to the industry's long-term prospects. "We generally expect onshore U.S. oil services to see robust demand into 2013, at least in liquids-rich basins," said the S&P report.

And given the geopolitical uncertainties that grips the world's major oil-producing region of the Middle East, a singular negative event there could cause oil and gas prices to jump and kick start a major domestic oil boom and significantly strengthen demand for services and equipment.

Supporting the bullish view of North America's oil and gas production potential, Norway's international oil giant Statoil ASA (STO) said in late June it aims to triple its North American oil and natural gas production by the end of the decade. It paid $4.4 billion for the U.S. exploration and production firm Brigham Exploration, a deal that provides it with oil-rich assets in North Dakota and Montana.

And China's international oil conglomerate, CNOOC (CEO), is in the midst of attempting to close on Canada's Nexen (NXY), one of the biggest players in Canada's oil shale industry, in a $15 billion deal currently being held up by regulatory scrutiny.

Sam Stovall, S&P Capital IQ's chief equity strategist, wrote Monday that since June 1, energy sector stocks have led a recovery with a 13.6% gain, well ahead of all other sectors and the S&P 500's 8.8% increase in the period.

Within the energy sector, refiners' and marketers' stocks posted the biggest gains, but shares of equipment and services companies are also rallying, gaining almost 6% in the week ending Aug. 3.

That's coincident with the strong second-quarter results coming from the largest companies in the sector. The biggest of all, Schlumberger (SLB), reported a profit of $ 1.05 per share, up 4.8% from a year earlier on 16% revenue growth. Another industry leader, Baker Hughes (BHI), reported a 30% jump in profit to $1 per share on a 12% increase in revenue.

Here are nine oil-field and oil-and-gas equipment and services stocks with the best prospects, ranked in inverse order of the number of analysts' "buy" ratings:

Stock quotes in this article: TESO, SLB, SPN, BHI, HAL, NOV, FTI, HOS, GLF 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs