“Top 2 Superstars of the New Deepwater Supercycle…” (Picks from Energy Strategist)

Sniffing out the deepwater services stocks teased by Robert Rapier

By Travis Johnson, Stock Gumshoe, April 2, 2013

There are some folks who believe that oil is on a path to becoming inexorably cheaper, thanks in part to the resurgence of the United States as a growing oil producer, but I think most experts agree with Robert Rapier, the editor of the Energy Strategist, that we’re going to remain in a pretty strong cycle for investing in unconventional exploration and production for many years.

And a big chunk of oil exploration now is happening not just in frontier countries who don’t have established oil production histories, but deep under the ocean in far-offshore areas where old, conventional production techniques just don’t cut it. You’ve heard tales of this before, I’m sure, of the incredible technical achievements made as Brazil (among others) explores for oil under two miles of ocean and thousands of feet more of salt and rock.

It’s hard and expensive to turn these discoveries into production … but countries and companies are motivated to do so all the same. Whether that motivation comes from simple profit potential, with the assumption that oil will remain expensive enough for long enough to justify these 10-20 year capital investments in exploration and infrastructure, or whether they’re simply looking for security and a place at the global bargaining table as folks like OPEC or Russia throw their weight around, well, it doesn’t necessarily matter. The money’s going into exploration, and they’re finding big new fields offshore and gradually bringing them into production, particularly off of South America and Africa (with companies like Byron King’s recently teased African explorer lining up for rigs), and there’s going to be money made as a result.

So who are the companies that Rapier says will make us some money as this “Deepwater Supercycle” continues? Here’s how he teases ’em:

“One is the undisputed ‘Google’ of deepwater search and discovery. Its revolutionary 3D technology scans millions of remote, undersea acres in the hunt for vast new offshore oilfields…

… and the other company drills for oil so expertly, customers are lined up to pay multi-year fees reaching $650,000 per day.

“If you believe nothing else in these confusing times for energy investors, please believe this: Oil is STILL the key to the world’s energy future.

“Not since the 1920s oil strike in the Middle East, when the developed world became dependent on Arabian production, have we seen the NEW FUTURE of oil discovery so starkly revealed.

“Below, I offer up TWO remarkable companies which, taken together, just about claim EXCLUSIVE POSSESSION of the keys to that future. Think of them as the ‘Dynamic Duo’ of deepwater oil discovery and production.

“Own both of these stocks and you’ll be profiting off the world’s unquenchable thirst for oil for years to come.

“Stock #1: It’s nearly impossible to DISCOVER deepwater oil without this high-tech explorer.

“Stock #2: It’s nearly impossible to PRODUCE deepwater oil without this drilling dominator.”


Sound good? Well then, let’s see if we can name those two stocks for you — without, of course, pitching in $600 a year for The Energy Strategist (you can do that if you want to, sure, but don’t do it just to find out their secret stocks — subscribing to anything is a decision better left to the sober moment after you know the stocks they’re teasing).

If you’re curious about The Energy Strategist, by the way, all I can tell you so far is that it used to be edited by Elliott Gue and it generated several interesting ideas during his tenure — we’ve seen mostly good reviews, but they’re a bit dated now (if you’ve ever subscribed, please chime in and tell us what you thought). The last pick teased by Rapier was Anadarko Petroleum, in part because of their latest offshore discovery in Mozambique (though that’s gas, not oil), and the shares are pretty close to where they were when he touted ’em about six weeks ago.

And moving on to those two “Deepwater Supercycle” picks, here are the rest of the clues that we get:

“The First of the Dynamic Duo: ‘The Discoverer’

“… was just recognized by Forbes as a top innovator in oil services. Often working in remote, challenging regions, it’s renowned for inventing cutting-edge technologies enabling clients to discover and analyze oilfields safely and efficiently.

“The company’s unique mix of services is its key selling point. While its competitors offer many of the same basic oil services, my pick stands out for its technological innovations and the strength of its exploration capabilities….

“… my recommendation has invented a way to measure and analyze target fields before a company commits to the enormous investment needed to get the oil out of the grou