NEW YORK (TheStreet) -- The S&P 500 has gained 2.2% so far in October, while the S&P 500 Energy Index surged 3.7%, outperforming the broader markets, despite a bleak outlook for crude oil and natural gas.

The following 10 energy stocks are expected to gain at least 37% in the upcoming months, according to analysts' consensus estimates. A few of these stocks find favor among prominent investors, including George Soros. He has placed two of these stocks in the top 30 holdings of Soros Fund Management LLC, as of June 30.

While these stocks are anticipated to outperform the sector, investors will likely benefit from an improved sector outlook.

10. Ultra Petroleum ( UPL) is an independent exploration and production company engaged in developing natural gas reserves in the Green River Basin of Wyoming. Early exploration and development is under way in the Appalachian Basin of Pennsylvania.

During the first half of 2010, production augmented by 17% and Ultra reported a 42% increase in earnings from the year-earlier period. For the full year, the guidance is an 18%-20% increase in production. In addition, Ultra has maintained a production growth rate of 20% for 2011 and 2012.

Drilling in the Pinedale averaged 50 net wells during the first half of 2010, and the full-year target is 117 net wells, J.P.Morgan reports, citing Ultra's improving operational efficiencies. In addition, cost per well declined to $4.6 million during the second quarter from $4.8 million in the first quarter and $5.0 million in 2009.

Ultra's operating profit margin for the fiscal year stands at 52.3%. In comparison, Occidental Petroleum ( OXY), Murphy Oil ( MUR), Whiting Petroleum ( WLL) and Plains Exploration & Production ( PXP) have margins of 31.7%, 7.0%, 14.8% and 38.7%, respectively.

Of the 22 analysts covering the stock, 12 recommend buying, 10 say hold, none advise selling the stock.

9. Petroleo Brasileiro ( PBR) is the largest integrated oil and gas company in Brazil. The state-run company is involved in the exploration and production of crude oil and natural gas, and operates the country's existing oil refining capacity.

Petrobras is well positioned to benefit from Brazil's increasing demand for refined products. Since the government mandates prices, Petrobras is less vulnerable to price volatility and the uncertainty, factors that erode U.S. refiner's profit margins. On the other hand, the company is subject to political interference, raising the possibility of discord in government vs. shareholder interests.

Petrobras' expertise in deep-water drilling rigs provides a competitive advantage over other oil companies. The company has increased its presence in the Gulf of Mexico and offshore West Africa. While oil majors have been cutting back on exploration and development, Petrobras has fixed capital expenditure plans until 2014, ensuring faster growth. The company is well positioned to derive benefits from investments in Espirito Santo, Campos and Santos pre-salt oil reserve basins.

During the past 12 months, the return-on-equity has been 22.4%, higher than competitors. Exxon Mobil ( XOM), ConocoPhillips ( COP), Total ( TOT), Chevron ( CVX) and BP ( BP) have ROEs of 17.2%, 8.3%, 16.6%, 11.7% and 17.2%, respectively. Other oil giants, Royal Dutch Shell ( RDS.A), Eni S.p.A. ( E), Imperial Oil ( IMO) and Tenaris ( TS) have ROEs of 9.5%, 9.6%, 17.1% and 13.5%, respectively.

Of the 18 analysts covering the stock, 12 recommend buying, 6 holding, while none advise selling.

8. Cabot Oil & Gas ( COG) is engaged in the exploration and development of oil and gas properties and has reserves in Appalachia, the Rocky Mountains and the Gulf Coast.

Cabot's reserves are well diversified between low-risk and long-reserve Appalachian assets; large-volume and rapid-payout Gulf Coast properties; and large prospects in the Rocky Mountains and Anadarko Basins, Zack's Investment Research reports. Divestment of Canadian operations has boosted cash reserves, thereby supporting Cabot's expansion drive.

The stock is currently trading at an expensive PE multiple of 24.1. In comparison, Chesapeake Energy ( CHK), Newfield Exploration ( NFX), Devon Energy ( DVN) and Cimarex Energy ( XEC) are trading at PE multiples of 7.4, 11.1, 13.2 and 14.0, respectively.

Of the 22 analysts covering the stock, 13 recommend buying, 6 suggest holding, while 3 advise selling the stock.

7. Advantage Oil & Gas ( AAV) is engaged in oil and gas exploration and production with major assets in Western Canada. The company is focusing on the development of the Montney natural gas resource at Glacier.

The guided production average is expected to reach 26,600-27,200 barrels of oil equivalent (boe) during the first half of 2011 from an anticipated 23,300-23,800 boe during the second half of 2010. Meanwhile, production costs are expected to decline, providing an opportunity to improve the profitability of the company.

The stock is trading at a fiscal-year EV-to-market cap ratio of 1.41. In comparison, EnCana ( ECA), Canadian Natural Resource ( CNQ), Penn West Energy Trust ( PWE) and Baytex Energy Trust ( BTE) are trading at fiscal-year EV-to-market cap ratios of 1.28, 1.23, 1.27 and 1.12, respectively.

Of the 10 analysts covering the stock, 80% recommend buying, 2 suggest holding, while none advise selling the stock.

6. Petrohawk Energy ( AAV) is an independent oil and natural gas company engaged in exploration, development and production. Petrohawk is focusing on a portfolio of assets in Haynesville Shale, the Lower Bossier Shale, the Eagle Ford Shale and the Fayetteville Shale.

During the second quarter, the company produced an average 625 million cubic feet natural gas equivalent (MMcfe) per day, beating the guidance of 610-625 MMcfe per day.

The stock is trading at a PE multiple of 20.1. In comparison, Apache ( APA), EOG Resources ( EOG), Denbury Resources ( DNR) and Concho Resources ( CXO) are trading at PE multiples of 13.5, 42.0, 31.0 and 30.3, respectively.

Currently, Petrohawk is trading in a symmetrical continuation triangle, implying a bearish pattern. Of the 29 analysts covering the stock, 24 recommend buying, four suggest holding, while one advises selling.

5. TransAtlantic Petroleum ( TAT) is a vertically integrated, international energy company engaged in the development, exploration and production of crude oil and natural gas. TransAtlantic holds interests in oil and gas properties in Turkey, Morocco, Romania and California.

During August 2010, TransAtlantic Petroleum acquired Amity Oil International and Petrogas in a deal worth $100 million, and a significant amount of 3D seismic data. "Our inventory of conventional oil and gas targets has been substantially enhanced with our aggressive seismic acquisition programs and the acreage position that will follow the Amity and Petrogas acquisition. But perhaps more important is the potential for unconventional gas, where our fracture stimulation equipment will allow us to pursue opportunities that were previously unrealized due to stimulation requirements," said Gary Mize, the company's president.

Of the four analysts covering the stock, three recommend buying, while one advised selling the stock.

4. InterOil ( IOC) is an integrated energy company operating in Papua New Guinea and the adjacent Southwest Pacific region.

After reviewing the company's LNG partnership with Energy World, Morgan Stanley has raised Interoil's price target to $135 from $125, Bloomberg reports. Breakeven costs for this LNG partnership are estimated to be among the lowest, thereby boosting the company's profits in the quarters ahead. InterOil is estimated to report earnings of 52 cents per share for 2010, compared to 15 cents a share during 2009, according to analysts polled by Bloomberg.

Of the four analysts covering the stock, three recommend buying, one suggests holding and none advise selling.

3. EXCO Resources ( XCO) is an independent oil and natural gas company engaged in the exploration, development and production of onshore oil and natural gas properties in East Texas, North Louisiana, Appalachia and the Permian.

During the second-quarter, production averaged 280 million cubic feet natural gas equivalent (MMcfe) per day, up 33% from the year-earlier period. Earnings for 2010 are forecast at $3.52 per share, as opposed to a loss of $2.35 a share during 2009, according to analysts polled by Bloomberg.

The stock is trading at a PE multiple of 17.4. In comparison, Bill Barrett ( BBG), Forest Oil ( FST), Ultra Petroleum ( UPL) and Continental Resources ( CLR) are trading at higher PE multiples of 21.4, 17.5, 19.3 and 33.0, respectively.

On Tuesday, BMO capital Markets reiterated an outperform rating with a price target of $17, while Stifel Nicolaus reaffirmed a buy rating at $21. Of the 16 analysts covering the stock, 14 recommend buying, one suggests holding, while one advises selling the stock.

2. Cobalt International Energy ( CIE) is an oil and gas exploration and production company focusing on deep-water drilling in the Gulf of Mexico, offshore Angola and Gabon. Cobalt has strategic relationships with French oil giant Total ( TOT).

The stock is down 40% from the January 2010 levels. On a risk-adjusted basis, the stock underperformed broader markets and has provided a -20% (alpha) return over the past six months.

Currently, the stock is trading at a lower fiscal-year EV-to-market cap ratio of 0.72. In comparison, PetroQuest Energy ( PQ), Nexen ( NXY), Noble Energy ( NBL) and Marathon Oil ( MRO) are trading at fiscal-year EV-to-market cap ratios of 1.24, 1.47, 1.11 and 1.23, respectively.

Of the nine analysts covering the stock, five recommend buying, four suggest holding and none advise selling.

1. Atlas Energy ( ATLS) produces natural gas in the Appalachian and Michigan Basins, and is a leading producer in the Marcellus Shale in Pennsylvania. The company controls Atlas Pipeline Partners ( APL) and Atlas Pipeline Holdings ( AHD).

Atlas has reported a record third-quarter production of 118.3 million cubic feet of natural gas equivalents (MMcfe), up 18.4% year-on-year and 7.7% over the prior quarter. Production at Appalachian reached a record 63.3 MMcfe, up 53.2% from the year-ago period and 5.4% from 2010 in the second quarter. "Our strong operating results and well performance in the third quarter exceeded our earlier estimates and reflect the quality of our acreage, the relatively shallow decline of our wells," said Richard D. Weber, president of Atlas Energy.

During April, India's Reliance Industries acquired a 40% of the Atlas-owned Marcellus shale gas assets, gaining access to 343,000 acres, or 13 trillion cubic feet of gas. This was an important deal in the shale gas space. Later, Reliance struck similar shale gas deals with Pioneer Natural Resources ( PXD) and Carrizo Oil & Gas ( CRZO).

Atlas stock is trading at a fiscal-year EV-to-market cap ratio of 1.98. In comparison, Range Resources ( RRC), Anadarko Petroleum ( APC), EQT Corporation ( EQT) and Southwestern Energy ( SWN) are trading at fiscal year EV-to-market cap ratios of 1.28, 1.33, 1.27 and 1.10, respectively.

After testing lows on Sept. 23, Atlas Energy has gained around 23%. The company is estimated to report earnings of $2.94 a share for 2010, as opposed to a loss of $1.55 per share during 2009, according to analysts polled by Bloomberg.

Of the 11 analysts covering the stock, 10 recommend buying, while one suggests holding.

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