As oil prices rise, the marginal cost of each new oil discovery falls. Finding the oil requires the necessary tools, and DWSN can provide them.

The market has been placing a hefty premium recently on deep-water drillers. Deep-water drilling requires significant capital investment and technological expertise, and at the same time represents one of the few bright spots in the ongoing search for new sources of oil. Additionally, the company has guaranteed contracts for the near-future, reducing the risk of short term price volatility due to fluctuating rig day-rates.

Sector has been on fire recently, and this stock has been no exception. Higher oil prices should enhance the profitability of Oil States' Canadian oil sands services. Think of it as a play on alternative energy (oil sands) and traditional energy rolled into one.

Integrated oil has been less than sizzling of late, part of which can be chalked up to the strong gains of the past several years. Long-term however, there's no reason why the sector shouldn't see a nice boost from higher oil prices.

Another deep-water driller, appealing because of its very nice growth rates. Management has been exercising options en masse recently, and has a pattern of doing so before earnings releases, so be wary of buying before the Q3 results on August 7th.