Even without $50 oil, some experts continue to gush about certain energy stocks.

For example, Oppenheimer analyst Fadel Gheit has once again pointed to

ConocoPhillips

(COP) - Get Report

as a good investment despite the recent fall in oil prices. And Gheit remains more cautious than some. He believes that oil, which headed back up toward $47 a barrel on Friday -- and fetched more than $55 a barrel last month -- is ridiculously overpriced. He now estimates that unfounded fears of supply disruptions have inflated oil prices by up to $20 a barrel.

He notes that ConocoPhillips has based its own outlook on oil priced in the high $20s.

"We believe the current oil bubble will burst, but are not sure when," Gheit wrote on Friday. "COP shares could benefit from the typical flight to quality by energy investors."

For now, he conceded, ConocoPhillips continues to exceed its own goals "with some big help" from record energy prices. But he also credited merger-related savings, "far in excess of the original estimates," for part of the company's success. He said that ConocoPhillips has managed to deliver higher shareholder returns than any other oil major over both a one-year and three-year timeframe. And he believes the company will continue to outperform its peers -- regardless of where energy prices go.

"Although the stock performance should continue to reflect the direction of oil prices, we believe COP has built a strong foundation on which it can build future growth and create shareholder value," he explained. "And because of its small size relative to the super majors, it has -- by far -- the biggest upside potential."

ConocoPhillips inched up 15 cents to $86.41 on Friday. The stock has already soared more than 50% in a year.

Sunny Forecast

But Gheit predicted even better things to come.

He highlighted opportunities across all of the company's business lines, beginning with its big exploration and production unit. Domestically, the company could find itself building a new $20 billion gas pipeline in Alaska -- where it ranks as the largest lease holder -- if support from Congress keeps building. Meanwhile, the company already stands as the No. 2 gas marketer in the country and continues to expand its activity.

Elsewhere, Gheit noted, ConocoPhillips is also well-positioned. The company owns a large stake -- which could grow -- in Lukoil, one of the largest oil producers in Russia and, indeed, the world. In addition, it is part owner of a big oilfield in Iraq.

That "could prove very valuable if the situation in Iraq, which looks bleak, improves," Gheit stated.

Meanwhile, Gheit said, the company's refinery division -- helped by its ability to process heavy, discounted crude -- continues to boast the highest returns and utilization rates in the group. And its chemical business, once caught in a long cyclical downturn, is now enjoying its strongest margins and earnings in years.

Gheit credited energy prices, which have helped other oil majors as well, for only part of that success.

"Although rising tides have lifted all ships," he declared, "COP has sailed to the top."

Smooth Sailing

Still, big E&P companies like

Anadarko

(APC) - Get Report

have the wind at their backs as well.

Over the past year, Anadarko has blown past the broader market -- and even super majors like

ChevronTexaco

(CVX) - Get Report

and

Exxon Mobil

(XOM) - Get Report

-- with a stock gain of 53%. And it pledged on Friday to further increase its activity, which could translate into additional gains, in 2005.

Next year, Anadarko plans to expand production volumes by up to 11% despite recent asset sales. CEO Jim Hackett said that "it makes perfect sense" to accelerate development efforts in today's environment of high energy prices. The company also said that it expects to achieve a reserve replacement rate of up to 200%.

Anadarko's stock climbed 34 cents to $68.47 following the report.

Meanwhile, Prudential analyst Jason Gammel appears to be growing more bullish on the E&P sector overall. In a new report published last week, Gammel noted that domestic gas production continues to be hampered by the lingering effects of Hurricane Ivan. He now believes that full production may not be restored until 2005. Even then, he said, production will still probably drop from this year's declining levels.

"We continue to believe that declining U.S. natural gas production will be the overriding fundamental issue over the next several years," he wrote.

Thus, Gammel -- who has a neutral rating on the sector -- is starting to warm up to the group.

"These companies, in general, are much stronger entities than they were two years ago," he explained, and are therefore "beginning to support a more favorable outlook."