As we've seen onshore, technology is making it possible to generate profits from oilfields previously considered mature, or tapped out. The shallow waters of the Gulf of Mexico are proving to be no exception, as companies utilize advancements in drilling and seismic technology to pump a surprising amount of oil out of a region previously left for dead.
Crazy like a fox
When SandRidge Energy
CEO Tom Ward stressed that the company picked up Dynamic's assets on the cheap, for $1.275 billion, which was less than the estimated $1.9 billion value. The assets are 50% oil, and Ward is confident that production will fund its onshore drilling endeavors.
But SandRidge may have been onto something. Since January of last year, shallow-water rig contracts are up 32% in the Gulf. Ten permits to drill new wells were issued in February alone.
Majors are there, too
The big players aren't going to pour a ton of additional resources into developing the shallow end of the Gulf, but the ones that are already there will certainly take advantage. Chevron
As is the case with SandRidge, many of these larger outfits treat their shallow water Gulf operations as a slush fund for other projects. Apache
Fellow Fool Travis Hoium didn't care for Hercules Offshore's
Oil prices sitting above $100 and improved seismic technology have enabled companies to increase production in aging fields. Energy XXI
The shallow waters of the Gulf of Mexico are not the next Bakken Shale, but they are also not the curse of death investors once pegged them to be. The high price of oil is keeping the shallow-water drilling industry afloat for now, but the companies above aren't the only ones to benefit. Take a look at three more stocks Fool analysts believe will make a killing on high oil prices.
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