This column was originally published on RealMoney on March 30 at 1:45 p.m. EST. It's being republished as a bonus for TheStreet.com readers.Here we go again. There have been a number of deep potholes in the rising road that energy shares have traveled over the past couple of years, including December 2004, April and October last year and the present. The first three turned out to be good buying opportunities, and I think the same will hold true for the current dip. Declarations that the energy bull market is over are just as widespread now as they were during past pullbacks. Even though the increased demand from China, India and other developing nations is widely acknowledged, the energy curmudgeons just don't seem to believe that oil prices can stay as high as they've been for much longer. However, insiders in the sector seem surprisingly bullish, given the large percentage gains they are sitting on. There is hardly a rush to take profits, and though insider buying may not be as obvious now as it was several years ago, when strong purchasing made it a no-brainer to invest in the sector, the recent weakness has spurred a new round of buying. I'm sticking with the partners I re-entered the dance with in the fall: the exploration and production firms PetroQuest Energy ( PQ) and Goodrich Petroleum ( GDP). I pointed out in
Excellent FinancialsPetroQuest's and Goodrich's recent operating results and forward-looking statements add to my optimism. PetroQuest's revenue soared 77% to $39.9 million in the fourth quarter vs. the same quarter a year ago, and EPS rose 55% to 17 cents. Net cash flow from operations jumped 66% to $27.7 million. More importantly, management is projecting a 50% increase in production this year.
An OTC PlayAnother intriguing sign of just how bullish energy executives are comes from the booming business of another energy play I entered last year: Seitel (OTCBB: SELA). Don't let this stock's bulletin-board listing scare you off -- its market cap is nearly $500 million, and it has plenty of trading volume. It's making a successful recovery from bankruptcy and could regain an exchange listing in a year. Seitel has one of the largest libraries of 2D and 3D onshore and offshore seismic data in North America, which it sells to explorers and drillers. While the company's offshore (mainly Gulf of Mexico) data are relatively easy to duplicate, its onshore library is more unique. It takes a lot of authorization from private landowners to get this information.
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