“The One Stock You Must Buy Before Gas Prices Soar”

Drilling stock teased by the Gardner Brothers

By Travis Johnson, Stock Gumshoe, September 10, 2009

“In the short time it took gas prices to shoot from $1.50 to $4 a gallon, this little-known stock made investors 951% richer.

“Now Goldman Sachs says oil is going to rocket right back to $147 — and you can bet $4 gas won’t be far behind.

“This may be your last chance to get the full story and position yourself to cash in.”

That’s the lead-in to the latest teaser ad from the Motley Fool, which started filling up my mailbox over the last 24 hours, and it’s all about an oil service company that David Gardner is calling his “Best Buy Now.”

They’re calling the investors who know how to make money from this “Oil’s Hidden Millionaires” … a term they’ve used before. This time around, they’re touting a different stock for a different newsletter (this time it’s a driller, for the Stock Advisor letter … last time around, in the Spring of 2008 during the last runup to high gas prices, it was a seismic data company for the Hidden Gems newsletter).

So who do they think will be making millions from oil this time around as gas shoots to $4 a gallon? They quote Goldman Sachs on the $147 oil price, though I haven’t checked to see if GS has recently changed their forecasting — if there’s really anyone out there who can accurately predict oil’s moves, that’ll be news to me, the last year-end target I saw from Goldman was $85, but that was back in June or July.

Clearly there’s lots of reasons to expect oil to rise, and to expect it to fall — that’s why there’s a nice, crazy market in between where one group can sell to another. Are we worried about peak oil, or about the fact that new oil finds are more expensive, or about OPEC strangling supply? Or are we worried about the fact that cap and trade will cut demand, and weak Western economies are cutting demand, and that China and India’s auto markets may never be the gas guzzlers that the US was? I do personally expect oil to be expensive for a long time, but that’s a very vague expectation — I still think of $50 oil as expensive.

So clearly the Motley Fool folks are convinced that gas prices will shoot up again, and that oil’s climb will drive that spike — oil has already doubled off of those severe lows of last Winter, so certainly there’s been a lot of money made in the oil patch so far this year.

But more importantly, they’ve got a stock to tease for us:

“Over the past year, a crippling worldwide recession has dragged oil prices down to almost unthinkable levels — sending shares of even the strongest oil-services stocks (including the one I’m writing you about today) to levels we haven’t seen in years.

“But as these economies begin to recover — demand for oil will soar again.

“What’s more, ultra-fast-growing economies like China, India, and Brazil will put an enormous strain on a supply that is steadily shrinking — creating the potential for what experts call a “super-spike.”

That, in turn, will have oil companies desperately scrambling to find new oil fields.

“And right there is our opportunity!

“You see, only a handful of highly specialized companies have the state-of-the-art technology, the specialized skills, and the artful know-how needed to tap the world’s next great oil fields.

“That’s because these fields are located in some of the most hard-to-reach places in the world — hundreds of miles offshore and thousands of feet below the ocean’s surface.

“And one little-known company that specializes in offshore drilling is better positioned than all the rest…

“In fact, it has rigs located in some of the most remote — and profitable — places on Earth…

“One drills to depths of more than 20,000 feet off the coast of Equatorial Guinea.

“Another will soon start drilling off the coast Ghana — earning this company as much as $538,000 per day.

“Yet another drills in the waters off Malaysia, and has been booked by Shell Oil through August 2011.

“But those are just a few of the many rigs it has scattered around the world — and it’s in the process of building two more top-of-the-line rigs that will begin drilling as soon as 2011.”

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