Have a Swim in Dawson's Creek

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If Dawson's Creek stars Katie Holmes and James Van der Beek were looking to invest, nostalgia might direct them to Dawson Geophysical (Nasdaq: DWSN). With a name like L. Decker Dawson, I dare say the company's founder and chairman could have had a career on screen.

The growth story of seismic data provider Dawson Geophysical also makes for some epic drama. From the time it was first recommended by Motley Fool Hidden Gems in December 2005, the stock has soared more than 160%. After a seasonal hiccup last quarter, the company has thawed into spring with the resumption of impressive growth. After seeing no opinion pieces about last week's earnings report, I concluded Dawson must be a stock only Fools could love.

Revenue for the fiscal second quarter 2008 rose 31% over the year-ago period, to $78.4 million. Net earnings rose an impressive 54%, from $5.37 million to $8.29 million, or $1.08 per share. The addition of two new seismic data acquisition crews in 2007 contributed significantly to the revenue increase.

Oil prices remain near all-time highs, and the U.S. natural gas market is now beginning to catch fire. That energized market is adding further demand for the services companies, from the likes of Dawson Geophysical to contract drillers like Patterson-UTI (Nasdaq: PTEN). In the earnings release, Dawson singles out the importance of natural gas in fueling the surging demand, stating: "second quarter results reflect continued brisk domestic exploration activities by the Company's clients, particularly those clients seeking natural gas."

Accordingly, seismic crews are busy in areas that are becoming familiar names for natural gas, such as the Barnett Shale in Texas -- the stomping grounds of Chesapeake Energy (NYSE: CHK) -- and the Fayetteville Shale in Arkansas, which is dominated by Southwestern Energy (NYSE: SWN).

With surging demand from natural gas producers strengthening the company's order book, management is adapting by nearly doubling its initial 2008 capital expenditures budget to $55 million and adding yet another seismic crew. Dawson remains the leading domestic player in onshore seismic services. The growth it has enjoyed makes Dawson slightly less hidden now, but all indications are that it remains a gem.

Further Foolishness:

• The Sweet Smell of Seismic
• The Seismic Story From Zeroes to Heroes
• Dawson Gets Dirty