With oil at or near record prices, some major investors have quietly repositioned their assets to take advantage of low valuations in the oil sector.The last two weeks of December brought a wave of consolidation in the oil sector as hedge funds and large investment banks made investments in beaten-up oil stocks. These deals, which were announced during a typically slow time of the year, suggest it's wise to seek out any other undervalued names in the space. On the final day of 2007, Delta Petroleum ( DPTR) announced that Kirk Kerkorian's Tracinda Corp. would invest $684 million in the company. The $19-a-share price for the 36 million Delta Petroleum shares represents a 23% premium over the stock's closing price the previous trading day. The deal gives Tracinda a 35% stake in Delta. Delta Petroleum finished 2007 down about 18% despite rising crude prices. Clearly, Kerkorian sees value here longer-term. With Delta's assets in 15 states and undeveloped offshore oil in California, Kerkorian's investment will most likely be used to increase the number of rigs used. Separately, on the very same day, Transmeridian Exploration ( TMY) said that current CEO Lorrie Olivier made a tender offer of $3 a share to take the oil and natural gas company private. Transmeridian's principal assets are located in the South Alibel oil field in Kazakhstan. This oil field has estimated proven reserves of 72.9 million barrels of oil equivalent and 108.2 million barrels of probable resources. On past conference calls management has been adamant about the company's reserves -- however, for some time the market has seemed to disregard this, causing a large spread between actual share prices and the price at which company management thought shares should be trading. This recent offer suggests that the market has been wrong about Transmeridian. No one knows more about Transmeridian and its reserves than the CEO, who is leading this deal. Shares, however, are still trading well below the $3-a-share offer.