In an era of elevated energy prices, one argument noted in this space before is that oil and oil/natural gas service companies are likely to remain promising plays for the foreseeable future, barring the discovery of a cheap, widely-available, alternative energy. With this in mind, Core Laboratories is worth a review.

Core Labs (NYSE: CLB) analyzes petroleum reservoir rock and fluids, helping oil companies determine how much oil or gas exists in their reservoirs and how quickly it can be extracted.

Analysts see +20% revenue growth for CLB in 2008 on strong oil/gas well analysis revenue. Analysts also like CLB's ramping hydraulic fracturing / field flooding and reservoir management services. The Reuters F2007/F2008 EPS consensus estimates for CLB are $4.86/$6.07

Further, with global oil/gas exploration activity expected to increase 20-35% in 2008 after +20% increases in 2007 and 2006, analysts believe Core will be able to continue to increase its business at healthy rates. (Oil exploration budgets are likely to decline only if oil prices remain below $50 per barrel for a sustained period.)

The risks? Analysts are keeping an eye on Core's labor costs, and on the oil exploration budgets of key sector players.

The First Call mean rating for CLB is: Buy [8 firms]. Mean 2008 target: $145 [high: $172, low: $130].

Stock Analysis: Core Laboratories is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from CLB's shares. Sell / Stop Loss if you were to purchase shares in this company: $67.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.