3 Busy Energy Stocks

All right, I'll admit it: I'm entertained by salacious energy industry gossip. The energy world is rife with all sorts of wheelings and dealings: mergers, acquisitions, divestitures, joint ventures, and, my personal favorite, unsubstantiated buyout rumors. Sometimes it's flat-out impossible to keep track of everything that's going on, let alone take the time to separate the truth from the chaff. To that end, I've highlighted three energy stocks making smart moves to stay on top.

Nice assets
Houston-based Apache (NYSE: APA  ) likes what it sees in the North Sea, purchasing ExxonMobil's (NYSE: XOM  ) properties there for $1.75 billion. The fields currently produce both oil and natural gas, and at the end of 2010, reserves were estimated at 68 million barrels of oil equivalent (boe).

Apache CEO Steven Farris called the acquisition "the best North Sea assets we've evaluated since the Forties field in 2003." It's expected to increase Apache's North Sea production and proved reserves by 54% and 44%, respectively.

Apache also recently struck a joint-venture deal down under with Chevron (NYSE: CVX  ) , Kuwait Foreign Petroleum, and Shell to develop an LNG export facility in Western Australia. It is Apache's first foray into the LNG business.

It's about time
Hyperdynamics
(NYSE: HDY  ) signed a contract with CGG Veritas (NYSE: CGV  ) for a 3-D acquisition of about 2,500 miles of ocean floor off the coast of Guinea. The survey will utilize CGG Veritas' advanced technology to take a clearer and more detailed picture of the subsurface than a previous 2-D survey captured.

Hyperdynamics will also begin drilling off the coast of West Africa for the first time in early October, once the Jasper Explorer drill ship arrives from Singapore. A quick glance over at our free online investing community, Motley Fool CAPS, reveals that many investors have been waiting their whole lives for this moment. The area is no stranger to oil discoveries; only time will tell if Hyperdynamics can cash in.

Oil that doesn't flow
Imperial Oil (AMEX: IMO  ) agreed to purchase four boilers from Babcock & Wilcox (NYSE: BWC  ) for work in the Alberta oil sands. The boilers produce steam that is crucial for a variety of processes in Imperial plants, namely, steam-assisted gravity drainage. This technique is used frequently in oil sands to decrease viscosity in crude discovered in a state remarkably similar to Grandma Duffy's secret recipe for cold molasses. After the steam does its job, the oil flows more freely to wells that pump it to the surface.

ExxonMobil owns a 69.6% interest in Imperial, and together the companies are maximizing a variety of oil plays in Canada. According to Bloomberg, Imperial has the highest return on capital employed among its competitors in Canada, and it's been that way for the last five years. ROCE is essentially a company's earnings before interest and tax, divided by net assets.  The metric measures a company's efficiency and profitability in regards to its capital investments, something incredibly important in the oil and gas business.

Constant vigilance!
The energy industry is one that must be monitored closely. An investor's best bet is to keep an eye on press releases and conference calls, making note of what moves companies are making and the justification CEOs give for those moves. Internet-based tools like Twitter and My Watchlist are also great ways to stay informed on company updates and analysis.

Fool contributor Aimee Duffy doesn't own shares of the companies mentioned in this article. If you have the energy, check out what she's keeping an eye on by following her on Twitter @TMFDuffy.

The Motley Fool owns shares of CGG Veritas. Motley Fool newsletter services have recommended buying shares of Chevron. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (6) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 28, 2011, at 11:58 AM, apachewayne wrote:

    Steam in injected to decrease the crude viscosity not to increase it.

  • Report this Comment On September 28, 2011, at 1:45 PM, davelfla wrote:

    Just for accuracy sake, HDY will be spudding in the Atlantic Ocean next week, off the coast of Guinea.

    The Gulf of Guinea is a couple of hundred miles south and east of Guinea.

  • Report this Comment On September 28, 2011, at 2:25 PM, XMFAimeeD wrote:

    Good catch, those errors have been corrected.

    Fool on,

    Aimee

  • Report this Comment On September 28, 2011, at 2:57 PM, brchad wrote:

    Aimee,

    So did you change the article..... or move Guinea to the Gulf? Just curious!

  • Report this Comment On September 28, 2011, at 5:05 PM, XMFAimeeD wrote:

    I moved Guinea to the Gulf. It's less confusing that way.

  • Report this Comment On September 28, 2011, at 5:16 PM, Eerkes wrote:

    Can you make smart asset buys from exxon? It seems like exxon would have the leverage to always be making the smart move. What gives? Who got the leg up in this deal?

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