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We are in the middle of earnings seasons and earnings reports are coming fast and furious. I constantly look at these reports to see how the companies in my portfolio are performing and also to ascertain if I can find any trends that can provide some good new opportunities. Today, I have noticed two energy concerns (one I already own) that blew away earnings estimates and deserve further consideration and possible investment.

Patterson-UTI Energy (NASDAQ:PTEN) provides onshore contract drilling services to oil and natural gas exploration and production companies in the United States and Canada.

4 reasons I like PTEN at just over $21 a share:

  1. The company reported earnings of 40 cents a share today, which easily beat consensus estimates by 12 cents a share. Revenues were also around 9% above consensus. It was the fourth quarter in row the company beat on the bottom line.
  2. The stock is cheap at under 10x trailing earnings and just 10% above book value.
  3. The company has more than doubled operating cash flow (OCF) over the last three years. The stock is priced at under 4x OCF.
  4. The stock is selling near the bottom of its five year valuation range based on P/E, P/CF, P/S and P/B.

NOTE: I have owned this stock since late May when it was selling at $14, but believe it still has further upside.

Noble Energy (NYSE:NBL) an independent energy company with crude oil and natural gas interests. Its principal projects comprise onshore US projects located in the DJ Basin and Marcellus Shale; Galapagos project located in the deepwater Gulf of Mexico; Tamar project located in the offshore Israel; and Aseng and Alen projects located in the offshore Equatorial Guinea.

4 reasons NBL still has upside from $114 a share:

  1. Revenues grew 30% Y/Y and the company reported record quarterly cash flow of $824 million as well as record annual cash flow of $2.9 billion for 2012. The company reported earnings of $1.65 a share, beating consensus by 52 cents a share.
  2. It also reported a discovery at Big Bend in the Gulf of Mexico and a new reservoir discovery at Carla offshore Equatorial Guinea in the quarter.
  3. Revenue growth is projected to be near 20% for FY2013 as new production comes online.
  4. The stock is selling at 17.5x forward earnings, but looks much more reasonably priced on an operating cash flow (OCF) perspective. The company has grown OCF by 50% over the last three years and the stock is going for just 8x OCF.
Source: 2 Energy Concerns Crushing Earnings Estimates