BOSTON ( TheStreet) -- Turmoil in the international oil market is a boon for North American energy.

That's particularly true for companies that own oil-shale and oil-sands properties, and those that provide oil-field services used in exploration and production.

Shares of companies in the oil and gas drilling industry have jumped 23% this year, the third-best sector performance of 148 tracked by Morningstar. Oil and gas equipment services is up 11%, ranking 18th. The S&P 500 Index has risen 4.4%.

>>Bet on Oil, Stocks Moving in Lockstep

Big inflows into the sector are due to bets that homegrown oil will replace some foreign oil sources as international prices top 2 1/2-year highs. The escalation of political turmoil in Libya, which has about 2% of the world's known oil resources, has propelled the cost of crude.

Oil and natural gas resources in North America are huge, but extraction is expensive since it has to be removed using high-pressure blasting of water and chemicals from rock and sand formations. In contrast, oil in much of the Middle East is extracted by traditional drill-down methods.

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So there is new investor interest in exploration firms, oil-rig suppliers, drilling contractors and companies that provide material and technologies used in freeing oil and gas from North American deposits, as well as companies that have bought up drilling rights to properties with those deposits.

Indicative of the frenzied interest in North America's oil-shale deposits, PetroChina ( PTR) paid $5.4 billion to buy a Canadian project from EnCana ( ECA) last month, while ExxonMobil ( XOM), already the largest U.S. natural gas producer, said in January that it's on the prowl for new properties.

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Here are five companies in various parts of the industry to consider as investments:

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Chesapeake Energy ( CHK) is the second-largest producer of natural gas in the U.S. as well as an aggregator of undeveloped properties.

Based in Oklahoma City, the company explores for, produces and markets primarily natural gas within the U.S. The firm focuses on unconventional plays, most of them in the eastern U.S. It also has potential unrealized big profits from selling undeveloped oil-shale properties.

The firm aggressively built its properties portfolio over the past few years, which was a gamble, but given the current environment and other companies' appetite for undeveloped natural gas and oil properties, its strategy may well turn out to be brilliant.

The company is on a steady growth path. Its chief executive said Feb. 23 in a conference call that it aims to double its value within five years to the $70 billion to $80 billon range by increasing oil drilling.

But in contrast to oil, the company expects North American natural gas drilling to decline this year and next as prices remain low due to a glut.

Asset sales are a lucrative wild card. For example, Chesapeake sold its Fayetteville, Ark., shale gas holdings in a $4.75 billion cash deal at the end of February to BHP Billiton ( BHP).

In 2010, Chesapeake reported earnings of $2.95 per share. For fiscal 2011, analysts estimate earnings per share will decline by 11% to $2.72.

Standard & Poor's gives Chesapeake a "buy" recommendation, with a rating of four out of a possible five stars. It gives it a 12-month price target of $39, compared to its current price of about $34.

S&P's review of analysts' ratings found nine "buys," five "buy/holds," 16 "holds," one "weak hold" and two "sells."

Institutional investors own about 40% of its shares, led by Southeastern Asset Management, at 12%. Icahn Associates initiated a position in the fourth quarter of 26 million shares, giving it a 4% stake.

Chesapeake's shares are up 31% this year and 57% over the past three months. It has a $22 billion market value.

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Brigham Exploration ( BEXP) is primarily an exploratory firm that operates oil and natural gas wells. The company owns interests in about 550 wells in the Rocky Mountain region and in Texas, Louisiana and Oklahoma. Its wells are all on shore.

The company uses 3-D seismic imaging and other advanced technologies in its exploration process.

Brigham earned 60 cents per share in 2010 and analysts project that will rise to $1.12 per share in 2011 and $1.81 per share in 2012. They project 2011 revenue of $409 million, rising to $701 million in 2012.

Brigham's shares are up 32% this year and 104% over the past 12 months. It has a $4.2 billion market value.

Institutional ownership is at about 90% of shares, led by Barclays Global Investors, closely followed by Wells Capital Management and Van Eck Associates.

Analysts rate it six "strong buys," 10 "buys" and seven "holds," according to Thomson Reuters. Those same analysts give it a 12-month price target of $36.70.


Abraxas Petroleum ( AXAS) explores for and produces crude oil and natural gas, primarily in the Texas and Wyoming region. It is a developer of oil-shale properties.

In 2009, the company earned 16 cents per share. Analysts estimate that it will earn 2 cents per share when 2010 results are reported and that that will rise to 22 cents per share in 2011.

Institutional ownership is at about 50% of outstanding shares. The largest investor is Third Point LLC, followed by ClearBridge Advisors.

Analysts give its shares six "strong buy" ratings, one "buy" and two "holds," according to Thomson Reuters. Their mean 12-month share price target is $5.78.

Its shares hit a 52-week high of $6.16 on March 1 and are up 26% this year. A year ago, the stock was trading for about $1.85.

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Carbo Ceramics ( CRR) produces and supplies ceramic "proppant," a material used in the hydraulic fracturing of natural gas and oil wells. It increases production by injecting liquids into the wells under high pressure.

The Houston-based company also provides software, consulting services, spill prevention and containment, and geotechnical monitoring businesses. It sells its products and services to operators of oil and natural gas wells and to oilfield-service companies.

The company recently reported 2010 earnings of $3.40 per share versus $2.27 per share in 2009. Revenue increased 38%. Also worth emphasizing: The company has no debt.

Institutional investors own 48% of the company, led by Neuberger Berman funds, at 12%.

Analysts give it five "buy" ratings, five "holds" and one "reduce," according to Thomson Reuters.

Shares are up 18% this year, including a 52-week high of $126.04 on March 1, and 94% over the past year, giving it a market value of $2.8 billion.


Cameron International ( CAM) is an international supplier of oil and natural gas processing equipment, including pipeline valve and oil-rig pressure-control equipment, compressors, and other components used in oil and gas production and transmission. The company operates through three segments: drilling and production systems, valves and measurement, and compression systems.

The $175 million Integrity Williston Basin/Mid-North America Stock Fund ( ICPAX), which focuses on oil-shale explorers and developers, added the company to its portfolio in the fourth quarter.

Standard & Poor's has a "hold" recommendation on Cameron's shares but gives it three stars out of five in its rating system. It projects 2011 earnings of $2.72 per share, rising to $3.20 per share in 2012.

Fourth-quarter orders were $1.71 billion, an increase of about 16% versus the third quarter, as demand for oil-well blow-out preventers grew as rig operators upgrade their equipment to meet more stringent government regulations.

Institutional investors own 34% of its shares, led by T. Rowe Price, with 6.4%. Vanguard owns 5% and State Street, 4.5%.

Cameron's shares are up 19% this year and 43% over the past 12 months. It has a $14.5 billion market value. Cameron's shares hit a 52-week high of $60.89 last week.

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>>To see these stocks in action, visit the North American Oil Stocks portfolio on Stockpickr.

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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