9 Oil Stocks With Hot Prospects

BOSTON ( TheStreet) -- The continued growth of oil-shale drilling in North America and a big rebound in offshore drilling in the Gulf of Mexico has boosted the long-term investment prospects for the oil and gas industry's suppliers.

Standard & Poor's outlook for the oil and gas equipment and services industry for the next 12 months is "positive" as it notes that there are now 31 offshore deep-water drilling rigs operating in the Gulf of Mexico now, a 94% rebound in the two years since the BP ( BP) offshore oil rig explosion and leak of April 2010 prompted a moratorium on new drilling. S&P expects the number of rigs operating there will exceed pre-disaster levels by year-end, which means significantly more demand for contractor services.

And that, coupled with the continued growth of oil-shale exploration throughout North America and internationally, adds to the industry's long-term prospects. "We generally expect onshore U.S. oil services to see robust demand into 2013, at least in liquids-rich basins," said the S&P report.

And given the geopolitical uncertainties that grips the world's major oil-producing region of the Middle East, a singular negative event there could cause oil and gas prices to jump and kick start a major domestic oil boom and significantly strengthen demand for services and equipment.

Supporting the bullish view of North America's oil and gas production potential, Norway's international oil giant Statoil ASA ( STO) said in late June it aims to triple its North American oil and natural gas production by the end of the decade. It paid $4.4 billion for the U.S. exploration and production firm Brigham Exploration, a deal that provides it with oil-rich assets in North Dakota and Montana.

And China's international oil conglomerate, CNOOC ( CEO), is in the midst of attempting to close on Canada's Nexen ( NXY), one of the biggest players in Canada's oil shale industry, in a $15 billion deal currently being held up by regulatory scrutiny.

Sam Stovall, S&P Capital IQ's chief equity strategist, wrote Monday that since June 1, energy sector stocks have led a recovery with a 13.6% gain, well ahead of all other sectors and the S&P 500's 8.8% increase in the period.

Within the energy sector, refiners' and marketers' stocks posted the biggest gains, but shares of equipment and services companies are also rallying, gaining almost 6% in the week ending Aug. 3.

That's coincident with the strong second-quarter results coming from the largest companies in the sector. The biggest of all, Schlumberger ( SLB), reported a profit of $ 1.05 per share, up 4.8% from a year earlier on 16% revenue growth. Another industry leader, Baker Hughes ( BHI), reported a 30% jump in profit to $1 per share on a 12% increase in revenue.

Here are nine oil-field and oil-and-gas equipment and services stocks with the best prospects, ranked in inverse order of the number of analysts' "buy" ratings:

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