Have you noticed that oil prices are creeping up again as we head into the summer travel season? NYMEX crude futures have risen 30% in the past two months and at the present rate will hit $70 per barrel again within the next week or two. Oil prices are as high as they were at this time in 2006 -- and that's when oil hit $80 by summer.

If you haven't yet seen the cost increase in your receipts at the gas pump, you can sure observe it in the latest batch of quarterly reports from the energy sector. The latest energy company to benefit from this pricing environment is Hercules Offshore (NASDAQ:HERO), which attributed its 8% boost in net income this quarter to -- you guessed it -- higher oil prices. 

Why is an 8% climb in profits so impressive for a shallow-water oil driller that finds itself in a favorable environment? Doesn't a rising tide lift all drilling platforms? Maybe a little, but it turns out that after one of its unlucky drilling rigs was destroyed in Hurricane Katrina, Hercules received a large insurance payment that went on the books as net income one year ago. If you back out that insurance claim, you'll see that Q1 2007 earnings are up 171% from a year ago, and revenues are up 97%. The company beat analyst expectations by 21% and had its drilling platforms contracted out and in use 87% of the time during the quarter. That's a monster performance.

As a loyal, four-year Motley Fool Hidden Gems subscriber, I became all too aware of the mighty Hercules Offshore when the service recommended drilling competitor TODCO (NYSE:THE) three months ago. Unfortunately for us long-term value investors, Hercules announced a takeover of TODCO at a 23% premium in cash and stock over the current share price, and a 36% premium to where it was recommended in the newsletter. While a six-week 36% gain was nice, a value-oriented shareholder can't help feeling a bit ripped off at the deal, especially in light of the large numbers we're now seeing among TODCO's industry brethren.

One thing is clear, though -- with the current pricing environment and nearly all of Hercules' drilling rigs now on lease, it is going to be a very bright summer indeed for the mighty Hercules.

Interested in what other hidden values Tom Gardner and Bill Mann have drilled down to find? Check out a 30-day free trial to Motley Fool Hidden Gems.

Fool contributor Rick Casterline loves his hidden treasure but hates his surprise buyouts. He owns no companies mentioned in this article. TODCO is a Hidden Gems recommendation. The Fool has a disclosure policy.