If you try to follow every wiggle and waggle in the energy markets, you're asking to get motion sickness. Gas moves down because of supply numbers. Gas moves up because of a heat wave and an approaching storm, then moves down again when the storm passes and the heat breaks. Oil quivers with the launching of munitions in the Middle East and BP's (NYSE:BP) shutdown of a significant U.S. oilfield. And in the unlikely event that Islamic militants, Israelis, Iran, and the United States all sit down and sing "Kumbaya" together, I'm sure oil would drop.

What that means in practical terms is that you've just got to pick good stocks and stick with them until the underlying fundamentals or valuation change meaningfully. EOGResources (NYSE:EOG) would normally be counted among those good stocks, though ongoing worries about natural gas have been a damper.

Total revenue rose about 17% in the second quarter at EOG, while reported operating income rose 15%. Overall production increased about 7%, and while production guidance remained more or less constant, it looks like the company is expecting a little less in terms of North American gas and a little more in terms of expenses.

Ultimately it's this trade-off between rising expenses and uncertain prices that will tell the tale. EOG has good production growth prospects, solid reserves, and a leading position behind Devon (NYSE:DVN) and XTOEnergy (NYSE:XTO) in the valuable Barnett Shale region in Texas. It is also significantly exposed to natural gas, though, and fears about high storage levels and weaker pricing have sapped investor enthusiasm.

EOG is the sort of story where prospective investors might have to either engage in some market timing or accept short-term pain for long-term gain. My instincts are that EOG Resources is an undervalued but high-quality operator in a market where long-term trends in demand and supply favor higher prices. But I also realize that natural gas prices could conceivably challenge $5 again, and that would not make it fun to be holding stocks like EOG, Devon, or Chesapeake (NYSE:CHK).

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).