Oil Becoming a Much Deeper Subject

If there's any truism today in the world of crude oil, it's that it's becoming necessary to venture into progressively deeper waters to find meaningful discoveries. This week, for instance, Anadarko Petroleum (NYSE: APC) and Marathon Oil (NYSE: MRO) each announced meaningful finds at depths exceeding 4,500 feet. Those discoveries followed the disclosure last month that Petrobras (NYSE: PBR), the Brazilian state oil company, had splashed out to water depths exceeding 7,000 feet, before coming away with a huge discovery.

Anadarko's find occurred at its West Tonga prospect in the Green Canyon block of the Gulf of Mexico in about 4,700 feet of water. Marathon's discovery well is located about 100 miles off the Angolan coast in nearly 5,300 feet of water. During what oil-patch types call "drill stem testing," the well produced at a rate of about 5,400 barrels per day. Fools will be interested to know that among Marathon's partners in the program is Motley Fool Income Investor selection Total (NYSE: TOT).

My take on the nature of these three discoveries, Fools, is that those with exposure to deepwater drilling, including Transocean (NYSE: RIG) and Diamond Offshore (NYSE: DO), continue to warrant substantial investment attention. Both companies trade at forward P/E ratios between 10 and 11 times, and both will be prime participants in the producers' determination to wade into progressively deeper water in the quest for oil and gas.

To drill way down on related Foolishness:

• Drilling in the Heart of Darkness
• There's Still Bling in Diamond Offshore
• The Most Global of Businesses