NEW YORK (TheStreet) -- I was talking to Jim Cramer today about the ultimate winners of the drop in oil prices and oil stocks. There are some to be found but it is easier to find the losers. A careful hand is required.
The drop in oil prices has made a mess of U.S. oil exploration and production companies. Some of them are well financed, own core shale and offshore assets at good prices and have excellent efficiencies and cash flow from the assets that they are developing. Those companies are more likely to come through a relatively long period of low oil prices intact, able to again begin to grow after the necessary restructuring that must take place inside the oil sector.
Other oil companies are going to be the victims of a long and difficult six- to 12-month period of depressed oil prices. They are the ones with less than optimal acreage, expensive leases, lagging technology, higher recovery costs and difficult debt positions. I believe there are about two dozen companies that will be forced to consolidate in some way, either by selling assets or merging with other larger players. Those companies that refuse to move towards a restructuring have the potential of bankruptcy. I don't believe that oil prices will recover fast enough to avoid this.
Some of these names include Triangle Petroleum (TPLM) , Emerald Energy (EOX) , Energy XXI (EXXI) , Oasis Petroleum (OAS - Get Report) , Halcon (HK) , SandRidge Energy (SD - Get Report) and Goodrich Petroleum (GDP - Get Report) .
Investing in any of these names is making a bet on a favorable acquisition bid from a major, a very difficult game to play and highly speculative. I believe just investing long term in an independent U.S. E+P player is speculation enough for a very volatile oil market like the one we are facing now.
I talk more about the winners and losers in the U.S. energy space with Jim in the video above.
At the time of publication, the author was long APC, XEC and EOG, although positions may change at any time.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.