Newfield Exploration (NFX): An oil and natural gas producer with substantial assets in the Oklahoman Woodford shale, recent said that it expects production values to grow to 22% to 26% for the rest of 2008 over 2007 levels. Oklahoma regulators have been supportive of owner/operator oil companies recently. Newfield has pulled back substantially from its $70 high and trades with a forward P/E of 6.76, and EV/EBITA of 5.277

PetroQuest Energy (PQ): This is an independent oil and natural gas producer, which boasts a historical drilling success rate of 89%. PetroQuest has most of their assets located in the Arkoma basin in Arkansas. PetroQuest has about 40,000 net acres in the Woodford Shale (up 46%, since 2007), over 18,000 net acres in the Fayetteville Shale. The company has the highest acres over enterprise value (Acres/EV) of 27.3 million on 40,000 Woodford acres vs. XTO’s 120,000 acres on an EV/level of only 3 million. PetroQuest trades with a forward P/E of 9.92 and EV/EBITDA of 4.807

Ram Energy (RAME): Has large oil and natural gas findings coming online soon in the Barnett shale. Sales were up 222% last quarter based on high oil and natural gas prices What I find attractive about Ram Energy is how cheap it is vs. its peers. Ram Energy has a Price/Net Asset Value (NAV) of 0.28x, which is the lowest of its sector. Its EV/Proved Reserves, is also the lowest in the group, at $14.88

On the technology side, I like a company called Particle Drilling Technologies (PDRT). Basically, the company makes proprietary drilling bit systems, aimed partially at “hard-rock” formations. Unlike typical crush and grind bits (which are extremely costly and time consuming, partially in hard-rock formations), particle drilling blasts the hard-rick away by using small particles of hardened steel that are entrained in a drilling fluid. These steel balls impact the hard-rock by more than 4 million times per minute. The company is still in the early stages but recent tests in Utah and Texas showed that Particles bit technology only took 8 hours to drill a 120-foot hard-rock interval at depths exceeding 11,000 feet. Drilling through this same amount of hard-rock with standard drill bit technologies typically takes 24 hours or more. Particle management says that there technology can generate over $1 billion in revenue

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