Apache (APA) and Transocean (RIG): Best bets in energy

Posted Sep 13th 2007 1:43PM by Steven Halpern
Filed under: Newsletters, Bargain Stocks, Commodities, Oil, Stocks to Buy

Although he expects a slowdown in the economy in 2008, resources expert Curtis Hesler remains bullish on energy, including two favorite positions, Apache Corp. (NYSE: APA) and Transocean (NYSE: RIG). Here is his review.

The editor of The Professional Timing Service contends, "There is one energy company that everyone should have in his or her portfolio, Apache Corp. In fact, I believe this is the only major you should hold."

Indeed, he notes "They are well ahead of the curve in respect to oil technology with advanced use of 4-D seismic and seismic inversion programs, satellite imagery, and GIS systems, etc. They are very good at enticing additional production out of old wells, and they are one of the few large independents that has been able to grow their reserves."

The advisor continues, "Their discovery costs and overhead are among the lowest in the industry. Although they have some business in Egypt, they have no direct Middle East exposure. They know their business better than anyone, and they are on the cutting edge of exploration and production technology."

Hesler states, "There are few that can extend production from an old well like they can. So far, they have been able to grow their reserves; and with their properties in relatively safe countries, they will be a national asset in the event that U.S. supplies are threatened."

Another favorite of the advisor is Transocean, which intends to merge with Global Santa Fe, and form a new company that will still be called Transocean.

Hesler explains that Transocean shareholders will get $33.03 in cash and .6996 shares of the combined company. He notes, "I like the deal, but I am not thrilled with the cash." Nevertheless, he suggests, "Transocean is a dandy asset."

Overall, he states, "Transocean is a dynamite energy growth stock and everyone should have a few shares. The merger will make this one a powerhouse in deep water drilling and I expect the stock to soon lead the pack."

Each day, Steven Halpern's TheStockAdvisors.com features the latest stock picks and investment ideas from the nation's leading financial newsletter advisors.

Tags: apa, apache corp., energy stocks, oil stocks, rig, transocean