Triple-Digit Profits from Down and Dirty Drilling

An increasing number of marginal exploration and production projects are being fired up, due to the expectation of a dwindling oil supply. As oil prices rise, it becomes extremely profitable to tease oil out of higher cost reservoirs and reserves. This is the bread and butter of oilfield service providers.

These companies include drillers and drilling rig operators, drilling equipment manufacturers, well service providers and a multitude of other companies tied to the production and distribution of oil—companies that have been sitting on the sidelines for years. Not being truly appreciated for their technologies. Now it is their time to step up to the plate and nail one out of the park.

Not Convinced?

My name is Jon Markman and for the past 16 years, I’ve been helping individual investors build their results with 26% annual returns no matter what the stock market throws at us or what is happening half a world away.

 All this is done by buying dominant companies in overlooked and profitable micro-niche sectors—before Wall Street takes notice and builds up the stock price.

I’ve been telling my subscribers about these types of micro-niche companies in my Strategic Advantage service. And I don’t want you to miss out on these profitable opportunities, because we’ve been raking in the gains.

Oilfield services providers is just one example of a micro-niche sector—but I have many others on my current buy list. But since there is so much money to be made in this area right now—before the rest of the world catches on—that’s where I want to focus today.

Just check out the gains in my top three oilfield services providers that subscribers to my Strategic Advantage service are already sitting on:

• Oilfield Service Provider #1: 300% in just 11 months
• Oilfield Service Provider #2: 58% in only one month
• Oilfield Service Provider #3: 12% in two months

Start Digging

My favorite pick in this energy sector niche is a microcap oilfield service provider that is underappreciated and materially undervalued despite strong growth potential. In just two years, this company has grown revenues fivefold to $100 million and analysts forecast sales of $165 million for this year.

Many companies find one technology that works and build their whole business around it. And if it fails, the company goes under. This oilfield service provider isn’t one of those companies. There are five keys to its growth path and rising stock price:

• Proprietary chemicals and proprietary “artificial lift” devices
• Expansion of drilling tool rentals
• The ability to grow both organically as well as through acquisition
• The ability to grow its customer base both in number and geographically
• An expansion of earnings multiple

This company has grown revenues at its chemical and logistics division to an estimated $95 million this year from $12 million in 2003. Most of that growth has been organic, which means it has come as a result of the hard work of its own R&D and sales teams — not from acquisitions. And it believes that it only holds 2% of a $3 billion market for oilfield chemicals, so, as you can see, there is plenty of room for more market share growth.

The company’s key products are called “microemulsion chemistry.” These chemicals help in acidizing, fracturing, cementing and drilling applications. They’re especially helpful to oil companies that are trying to recover more oil from mature fields. An independent study showed that this company’s chemicals improved production rates at 250 test fields by 40%.

One of the cool things about these chemicals is that their main feedstock is citrus oils, known as “terpinenes.” They are literally refined from orange, grapefruit, lemon and lime rinds, much like the ingredients that you will see in many household cleaning products. And because it is made from fruit, it is biodegradable, which means it is environmentally friendly at a time when even the down-and-dirty energy companies care about such things.

So, who uses this stuff? Mainly, it is the large pressure-pumping operators among the oilfield services companies. Halliburton is this company’s largest customer and reportedly uses its fracturing fluids as a key differentiator in its sales pitch to Eastern Hemisphere customers. Schlumberger (SLB) and BJ Services (BJS) are also said to have started using these chemicals after a long test period, and their ramp-up in application will be a big part of a real acceleration in this company’s sales over the next couple of years.

Just to give you an idea of how it’s going: chemical sales are already running $1.8 million per week, compared with $8 million in all of 2005! Plus the firm’s chemistry R&D team has grown to 15 professionals who are working with a budget that is expected to triple to $2.1 million this year.

So Who Is It Already??

My #1 pick in this area has raked in a sweet 300% gain in less than a year. Did we strike black god? You bet. The stock is trading at around $48 with we’re looking at growth expectations north of 50% in 2008. Please don’t be put off by the success we’ve had so far—this stock is still cheap and as more and more investors realize its golden potential, they’re going to pay a premium for its shares!

Click here to learn more about this profitable niche in the energy sector and the name of my favorite company that is gushing black gold!

Sign up for Strategic Advantage today, and get all of Jon Markman’s  most recent buy advice on his #1 pick, in his new report, href="/order/?sid=8UT101"target="_blank">What’s New: A Close Look at 4 Companies Breaking New Ground as well as the names of the other oilfield services providers on his list. And you have direct access to every single one of Jon’s current recommendations. Plus, if during your first three months, his recommendations haven’t made you the profits you’re looking for (15%, 25%, 50%, or more — it’s your call), you can cancel, keep everything sent to you, and get a full refund — no questions asked. Even after your first three months, you’re still covered by this money-back guarantee.  If you’re ever unhappy, just let us know, and we’ll send you a full refund on the balance of your subscription. So what have you got to lose? Try Strategic Advantage for three months risk-free!