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In the first article of this two part series, I detailed the groundbreaking subsea compression technology oil and gas firms are developing to both improve recovery rates and reduce their reliance on expensive oil platforms. Below is a list of 9 companies leading the charge in the development of this game-changing technology. One industry consulting firm, Quest Offshore, has predicted that orders for subsea equipment will rise by 23% a year through 2015. While industry insiders will be very familiar with these companies, investors outside the oil and gas realm would be well served to add some of the following firms to their watch list for the coming two years.

Statoil (NYSE:STO) - Statoil is a Norwegian integrated oil and gas company whose primary operations are in Scandinavia and the Baltic. The company is currently installing the world's first full-scale seabed facility at its Tordis field, however, the facility will still require power from an oil platform Statoil already operates in the vicinity. Recovery rates for the Tordis field are expected to increase from the current 62% to 74%. Statoil's approach to subsea facilities is a smart one for a company that primarily operates in the North Sea and has a multitude of legacy oil platforms from which it can power the subsea facilities. By not having to develop additional technology to power the facilities from long distances, Statoil has been able to move faster than any other company in implementing full production subsea systems. The company currently trades at a P/E ratio of 5.77, offers a dividend yield of 3.5% and a dividend payout ratio of only 19%, leaving plenty of room for capex and R&D.

Shell (NYSE:RDS.A) - In light of Shell's recent bloody nose over the Kulluk grounding, the company can't get its subsea facilities into operation fast enough. Unlike Statoil's approach with power being derived from legacy oil platforms, Shell is working to install subsea compression units in its Ormen Lange field that receive power from shore. As the technology moves from the test phase to actual implementation, Shell will be able to reap the lowered operating expenses and increased recovery rate of subsea compression technology as well as the decreased public relations headaches stemming from oil platforms. Shell is working in conjunction with Statoil on the technology. However, as related above, the less complex Statoil system will most likely be brought online first. Shell currently trades at a P/E ratio of 8.31, offers a dividend yield of 4.7% and a healthy payout ratio of 35%.

Aker Solutions (OTCPK:AKKVY) - Aker Solutions is a Norwegian based oil services company with extensive experience in manufacturing subsea production systems. Its facility in Port Klang, Malaysia, is currently the only facility in the world where an entire subsea production system facility can be manufactured and tested in one location. These systems, though, still rely on a surface component such as a FPSO ship or oil platform. Aker's First Chief Engineer is credited with inventing the subsea compression concept 25 years ago and two years ago Statoil awarded Aker a $614 million contract to develop a subsea compression system. Aker's pioneering work in the field should allow it to win additional contracts and adapt its technology to use in new fields without legacy oil platforms for power.

Subsea 7 (OTCPK:SUBCY) - Subsea 7 functions primarily as an engineering, construction and services contractor to the offshore energy industry. As such, it will benefit not from the design and manufacturing of subsea systems or the increased recovery rates they offer, but rather from the installation and maintenance of the systems. Five years ago, the company installed the world's first subsea separator units at a depth of 1,200 meters for Total's Pazflor Project off the coast of Angola. Subsea 7 is currently trading around $25 per share with a P/E ratio of 12.29.

Cameron (NYSE:CAM) - Cameron International designs and manufactures flow equipment products and systems for the oil, gas and process industries and boasts more than 18,000 employees spread across the globe. One of its products was the blow-out preventer that was at the root of the Deepwater Horizon disaster and the company settled with BP (BP) for $250 million in December 2011 without admitting responsibility. More recently, the company has formed a joint venture with oil field services provider giant Schlumberger (NYSE:SLB) dubbed OneSubsea which is owned 60/40 Cameron/Schlumberger and is intended to compete with FMC Technologies (NYSE:FMC) and Aker Solutions. The joint venture should enable both companies to leverage their core competencies of systems and services to cater to a wide range of clients in the growing subsea space. Cameron currently trades around $61 per share with a P/E ratio of 24.03.

FMC Technologies (NYSE:FTI) - FMC's experience in subsea systems dates back to 1967 when it was awarded its first subsea project. The company operates three segments - Subsea Technologies, Surface Technologies and Energy Infrastructure. As I discussed in the first installment of this series, FMC helped Statoil develop its Lufeng oil field and is currently continuing its collaboration with Statoil through the development of an electrically driven, centrifugal gas compressor for Statoil's Asgard field. Even though FMC is a recognized leader in the field of subsea technology, I don't believe the technology will generate the kinds of returns it will for smaller companies with a tighter focus on subsea systems (i.e. Aker Solutions). The company currently trades around $46.85 per share with a P/E ratio of 27.72.

Oceaneering International (NYSE:OII) - Oceaneering International is another oil and gas equipment services company that focuses on operating in deepwater environments. Its Remote Operated Vehicles division contracts more than 270 ROVs to clients worldwide and its Subsea Products division provides made-to-order subsea systems to oil and gas producers. As more exploration and production companies plumb the ocean's depths, Oceaneering will profit from both the exploration, production and maintenance life cycles of subsea projects. The company currently trades around $63 per share, has a P/E ratio of 25.68 and yields 1.2% with a 27% payout ratio.

GE Oil & Gas (NYSE:GE) - A division of GE Energy, GE Oil & Gas provides products and services to clients at every link in the oil and gas production and transportation chain. GE Oil & Gas has provided research and development services to Shell's Ormen Lange project, specifically on autonomous subsea compressors. If GE's technology proves commercially viable, then its sheer size and resources should enable it to compete against smaller and more nimble companies such as Aker Solutions. As a division of yet another division of a global conglomerate, though, investors are subject to the successes and failures of other products and services GE offers. As a result, successful commercialization of new technologies won't move the stock price needle much. GE currently trades at $22.50 per share, has a P/E ratio of 17.41 and yields 3.4% with a 26% payout ratio.

Siemens (SI) - Siemens, the German electronics and electrical engineering behemoth, is also participating in the race to develop subsea compression production systems. Its subsidiary Siemens Industrial Turbomachinery is working with FMC Technologies on a compressor (described above) for Statoil's Asgard project. Similar to GE, though, Siemens' size will most likely negate any significant movement in the stock price from success in the subsea systems arena. Siemens currently trades around $110 per share, has a 17.41 P/E ratio and yields 2.6% with a 45% payout ratio.

Of the companies listed above, I believe Statoil, Aker Solutions and Oceaneering International offer investors the best potential for above-average returns. As I mentioned in the first installment of this series, Statoil is facing declining production from its North Sea oil fields and exploring new sources of oil in the Arctic. As such, the company's very future hinges on bringing new production online as quickly and efficiently as possible. Given the company's history and pioneering efforts in subsea technology, I believe it will be successful in its efforts and deliver outsize returns to shareholders. Aker Solutions and Oceaneering International will do the same, but for slightly different reasons. Their core competencies lie in the very technology that subsea compression builds on and the opening up of the Arctic and other new maritime oil fields only enhances their competitive advantages.

Source: 20,000 Leagues Under The Sea: Platform-Less Oil And Gas Production, Part 2 Of 2