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Irwin Greenstein, writing for Contrarian Profits, suggests that Repsol (REP), an oil major from Spain, could prove to be the sleeper oil play of 2009. With significant new oil finds, Repsol could put investors in a position to pocket gains.This from Irwin:

In one of the stealth oil developments this year, Cuban officials said last week that the Communist country is embarking on an aggressive exploratory drilling program to assess the potential offshore reserves.

Cuba has been relying on companies from China, Central America and the Middle-East for years now to pump crude from offshore rigs. This latest effort, 20 miles north of Havana, represents a new surge in drilling that could start as early as the second quarter in the Gulf of Mexico.

The biggest winner here for investors could be Repsol YSF. S.A., the oil major based in Madrid, Spain. Repsol will lead a consortium of drillers that includes India's state-run Oil & Natural Gas Co. and Norway's StatoilHydro. Additional exploratory drilling in the region of the Gulf under Cuba's economic control is anticipated in 2010 and 2011.

Repsol has been drilling in cooperation with Cuba for at least the past five years. While some skeptics believe that the estimated 20-billion barrels of recoverable oil could be too deep to justify production, Repsol has extensive experience in deep-water drilling.

If the news is good here, it could be the impetus that the stock needs to recover – putting investors in a position to pocket some gains.

Reposol currently trades on the NYSE at about $18, near the bottom of its 52-week range of $16.04 - $44.85.

The company has a market cap of $22.48 billion. Along with its subsidiaries, Reposol is involved in the exploration, development and transportation of oil, natural gas and liquefied natural gas. Its main markets include Spain, Argentina, Brazil, and Bolivia. As of December 31, 2007, it had 951,578 thousands of barrels of crude oil; and 8,156,157 millions of cubic feet of gas, as well as 6,514 service stations.

Repsol has made a significant new oil find in the deepwater area of the U.S waters of the Gulf of Mexico. Other recent discoveries include new gas discoveries in Peru and Algeria, and oil in the deep waters of Brazil's massive Santos Basin.

Reposol could have been dragged down by low crude prices versus any fundamental flaws in its operation. A top-line look at Reposol's numbers indicate an upward trend in revenues.

On November 13, 2008, the company posted net income of $3.63 billion in the first nine months of 2008, a 15% rise on the year-earlier period.

Repsol 's operating profit, a measure of the company's ordinary business, reached $6.54 billion, a rise of 18.9% year-on-year.

Profits across its major business units rose in most of its major business units. For example, its LNG unit saw a rise of 20.5% during the period over the previous year.

At the same time, Repsol agreed to pay a gross dividend of $1.29 per share from 2007 earnings, a raise of 39% from the previous year.

With these results, Repsol could prove to be the sleeper oil play of 2009. Oil prices continue to bump along the bottom and worldwide consumption of fuel will probably stay flat. Still, it appears that Repsol has hit bottom and is the way to long, slow climb upwards.

Disclosure: no positions

Source: Repsol: The Sleeper Oil Trade of 2009?