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In a terrible case of deja vu, just as the BP disaster in the Gulf of Mexico seemed to be under control, another oil rig explosion in the same body of water hit the newswires. Aside from the further threat to the environment, we will likely see more delays in exploration and drilling in American waters, and around the world.

New regulations are likely to make life more difficult for oil companies and anyone that feeds from that trough. But investors, and the general public, need to be realistic. The world needs oil. Our economies have grown dependent upon the slick stuff over the past century or so. As much as I would love for electric cars and bioplastics to take over tomorrow, the world isn't going to kick its addiction to oil anytime soon.

Needing more, finding less
Unfortunately, most of the easy oil has already been found, and we're having to resort more and more to what are described as unconventional sources. These include the tar sands in Canada and deepwater drilling off the exotic shores of Brazil, Israel, Nigeria, and China. As you might expect, these unconventional methods of producing oil are expensive.

As extracting oil becomes more expensive, companies like ExxonMobil (NYSE: XOM) and CNOOC (NYSE: CEO) would prefer to know what lies beneath before pouring billions of dollars down a hole. That is where CGG Veritas (NYSE: CGV), my "11 O' Clock Stock," comes in.

Fast Facts on CGV Veritas

Market capitalization

$3.2 billion

Industry

Energy

Revenue (TTM)

$2.47 billion

Free Cash Flow (TTM)

$433 million

Source: Capital IQ, a division of Standard & Poor's, and company filing. TTM = trailing 12 months.

Married to the sea
CGG Veritas is one of the leading seismic mapping companies in the world (using sound waves to map underground features), second only to Schlumberger (NYSE: SLB) subsidiary Western GECO. In addition to doing the actual mapping, CGG Veritas' subsidiary, Sercel, is one of the leaders in designing and manufacturing seismic equipment technology.

While CGG Veritas' teams are equipped to map land and sea, its focus is on the more technically challenging marine seismic mapping where its fleet and technological expertise give it an advantage. You could say CGG Veritas rules the waves.

Unfortunately, those waves have gotten quite crowded recently. As tends to happen when you combine the volatility of commodity prices with heavy asset investment that requires long lead times, the marine seismic industry is characterized by booms and busts.

Things get rough
During the heady days of 2005, 2006, and 2007, mapping companies couldn't keep up with demand, and capital spending ramped up, including orders for new ships. However, just as these new ships were ready for their maiden voyages, the global recession of 2008 hit. With the slowdown in world economies, freezing of credit markets, and plummeting oil prices, Big Oil truncated its exploration plans.

Now, CGG Veritas faces an environment of low demand and bloated fleets, which pushes up competition for every contract, driving down the prices charged for jobs. The good news in this situation: With more ships trying to map the seafloor, CGV subsidiary Sercel has seen plenty of demand for its products, and this division has provided some much-needed buoyancy to CGG Veritas' numbers.

To address the overcapacity issue, CGG Veritas retired nine ships, shrinking and modernizing its fleet. Unfortunately, there isn't much the company can do to increase demand for its services, and the moratorium on deepwater exploration in American waters (and related delays elsewhere in the world) resulting from the back-to-back disasters in the Gulf of Mexico definitely won't help.

Because of this, CGG Veritas' management isn't expecting to see a recovery in contract prices until 2011. As you might imagine, that has hurt the stock of late.

Smoother sailing ahead
However, these stormy seas can't last forever, and a tough operating environment will cull small, inexperienced players from the industry. When we finally make it through this economic uncertainty, demand for oil and exploration budgets will recover. CGG Veritas, with its fleet decked out with the best seismic equipment Sercel has to offer, will still be around, ready to ride the rising tide. And we'll be on board.

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Nate Weisshaar does not own any of the stocks mentioned above. Chevron is a Motley Fool Income Investor recommendation. CGG Veritas and CNOOC are Motley Fool Global Gains recommendation. Try any of our Foolish newsletter services free for 30 days.