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I am putting a good portion of my new capital into the energy sector. The primary reason I am doing so is the area is one of the few that is showing solid revenue and earnings growth right now. Retail sales are growing just 2% Y/Y, Utilities & Consumer Staples also are posting tepid growth, and Technology is hit or miss right now. I think earnings and revenue growth in the energy sector will continue provided oil & gas prices do not decline significantly, which I do not see in the near term. In addition to the small and midcap E & P concerns I have highlighted on these pages, I also like the outlook of several plays in the oil services space. Here are two small cap fast growing selections that look like they have solid upside ahead.

Hercules Offshore (NASDAQ:HERO) is a small (~$1.1B market capitalization/$1.9B enterprise value) oil services concern. It possesses the third largest jackup fleet (~38 jackup rigs) in the world. Revenue is tracking to better than 20% growth this fiscal year and current consensus calls for almost 30% growth in 2014. The shares are selling for less than 9x next year's projected earnings despite rapid expected growth.

The company is in the middle of an earnings turnaround as new rigs come on line and dayrates improve. Hercules lost 44 cents a share in FY2012 but is looking like it will post 17 cents a share profit this year. Consensus earnings estimates call for the company to be almost 80 cents a share in the black for FY2014.

During the second quarter the dayrates for the company's jackup rigs rose over 30% Y/Y. The company posted strong revenue growth in the quarter led by international which posted a better than 60% increase. Utilization rates also increased to ~78% in the international market from just under 52% in the year earlier period. The median price target by the 16 analysts that cover the stock is $9 a share, more than 25% above the current equity price.

Ocean Rig UDW (NASDAQ:ORIG) is a small (~$2.3B market capitalization/$4.9B market capitalization), Cyprus based oil services firm with 2 ultra deepwater semisubmersible drilling rigs and 8 ultra deep-water drillships. It also is currently in build phase with several other drillships. The company should post revenue growth near 20% this fiscal year. As newbuilds come online in 2014, analysts expect almost 60% revenue gains for FY2014. The stock sports a minuscule five year projected PEG (.61).

The company's new capacity will substantially boost earnings. Ocean Rig looks like it will post a profit of right around a half a dollar a share this year. However, the consensus EPS estimate for next year stands at better than $2 a share. This could prove conservative as the company has blown through bottom line expectations each of the last three quarters. The mean price target of the 12 analysts that cover the stock is north of $21 a share, approximately 20% above its current stock price.

Disclosure: I am long HERO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.