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Stock Strategist

Energy Picks for 2007

Oil and gas hunting just got fun, with several frontier fields on the horizon.

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We're always looking for energy trends that have long-term legs and plenty of forward momentum to overcome near-term oil and gas price volatility. Here are some energy stocks worth noting for 2007, thanks to frontier oil and gas discoveries and projects. Discoveries in 2006 revealed and confirmed several exciting new frontiers in the deep-water Gulf of Mexico, onshore gas shale basins in the United States, and oil sands in Canada. Technical advances in finding and extracting oil and gas--not just higher oil and gas prices--have made these frontier fields possible. Several companies are now poised for growth from new well hookups or project startups this year.

2007 Energy Picks Among Frontier Producers
2007 could be a banner year, with major projects to drive up production at several energy companies with frontier fields. In deep-water Gulf of Mexico, startup of the Independence Hub operated by  Enterprise Products Partners (EPD) will hook up 10 deep-water wells to transport natural-gas production to the mainland. Drilling in the Woodford Shale gas shale basin in Oklahoma could drive up natural-gas production for  Newfield Exploration (NFX). And, startup of the first phase of oil sands production at  Nexen's (NXY) Long Lake project in Canada remains on track for 2007. In the table below, we've provided a sample of energy companies we think have long-term project-driven upsides that will help ride out near-term oil and gas price swings.

Catharina Milostan does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.