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Like most equity sectors, oil and gas stocks have been negatively affected by softening economic conditions and the desire of many investors to move into more safe-haven investment vehicles. Oil and gas stocks generally move with the overall equity market as demand is driven largely by consumer confidence and spending. In my analysis of the oil and gas industry I found five key players that are benefiting from a low interest rate environment and are poised to produce strong gains in the coming quarters.

Chesapeake Energy Corporation (NYSE:CHK)

Although Chesapeake Energy has experienced large swings in price over the past year, I believe the stock is a good value at its current trading price around $22. With strong results from drilling operations in eastern Ohio and Pennsylvania in 2011, the company maintains a low payout ratio of 17%, pays a dividend of 1.70% and offers the potential for strong capital gains as it remains relatively inexpensive and the natural gas industry figures to play a large role in the future growth of the global economy.

There are a number of reasons for bullishness when it comes to the U.S. natural gas industry. For one, new technological improvements have allowed companies to utilize more efficient drilling wells, aiding margins and profitability. Additionally, growing industrial demand and the continued shift from coal to natural gas will spur industry growth in the long term.

In my opinion, strong growth prospects of quarter-over-quarter revenue growth and much higher year-over-year revenue growth than the industry average (54.10% vs 19.0%) make Chesapeake a strong value play for investors looking for good value in the natural gas sector.

ATP Oil & Gas Corporation (ATPG)

ATP Oil & Gas is currently trading around $6.50, toward the low end of its 52-week range of $5.71 and $21.40, and has experienced a strong downward trend since reaching highs around $18 back in March 2011. However, with quarterly revenue growth of 66.60% and gross profit of $281.81 million, ATP Oil & Gas is currently performing similarly well when compared to its key competitors such as Goodrich Petroleum, with a quarterly revenue growth of 48.40% and Petroleum Development Corporation at 45%.

High debt levels and uncertainty regarding earnings plague the stock. The company has a debt to equity of 647.06. Moody's expects that ATP Oil & Gas will need to restructure its debt in the near future as the company likely lacks the necessary assets and cash flow to cover its obligations.

Despite these headwinds, ATP Oil & Gas is set to benefit greatly from expansion in the Gulf of Mexico. This will allow the company to cover its debt service and gain ground heading deeper into 2012. In my opinion, the company is going through a turnaround phase. We could likely see growth triple in 2012, due to the company's robust production numbers before major debt liabilities come due in 2015. ATP Oil and Gas is a good value at current prices, and I expect it to perform well in the coming quarters. Much like Exxon Mobil, ATP Oil & Gas has seen conservative play in an otherwise volatile market. With a conservative balance sheet showing total cash of $11.02 billion, total debt of $16.76 billion, and a 2.20% dividend yield, I believe ATP Oil & Gas remains an attractive buy. The company has increased its dividend for 29 straight years, and with a low payout ratio of 22%, the potential for dividend growth remains.

Although the stock may not be cheap on a price-to-earnings basis relative to peers (9.50 times), it does feature a higher return on equity (26.85%) than key competitors like BP Plc and Chevron, which return 23.54% and 23.75%, respectively. Investors that believe in the growth of global energy demand should take a long look at ATP Oil & Gas. I believe this company is a good candidate for research due to its solid fundamentals and conservative movement over the past year. I expect the stock to trend upward in the short to mid-term.

Exxon Mobil Corporation (NYSE:XOM)

Exxon Mobil has been trading around $84 at the time of writing. Over the past year, the stock has dipped from a high of over $87 per share in early May 2011 to a low around $70 in late August, which represents a relatively conservative play in an otherwise volatile market. With a conservative debt profile and a 2.20% dividend yield, Exxon Mobil remains an attractive buy. The company has increased its dividend for 29 straight years and with a low payout ratio of 22%, the potential for dividend growth remains.

Although the stock may not be cheap on a price-to-earnings basis relative to peers (9.50 times), it does feature a higher return on equity (26.85%) than competitors like BP and Chevron, which return 23.54% and 23.75%, respectively. In my opinion, Exxon Mobil is a good value at current trading prices. I would recommend this stock to investors looking for a solid mid to long-term investment.

GMX Resources Inc. (GMXR)

GMX Resources has experienced a strong downward trend and currently trades around 1.35 cents, at the low end of its 52-week range of .91 cents to $6.48. Additionally, double-digit short interest indicates bearish sentiment toward the stock. With total cash of $3.23 million and total debt of $372.82 million, the company presents significant weakness in its balance sheet. A negative earnings per share of 6.29 indicates that the market has discounted GMX Resources. Despite this, quarterly revenue growth remains at 14.20% The company does show strong earnings growth and with the anticipation of increased production, this stock will show improvement. In my opinion, GMX Resources is currently a good value as it is positioned to bounce back in the mid to long-term.

Apache Corporation (NYSE:APA)

Like other companies on this list Apache has been hit hard by equity market instability in recent months and has seen almost 70% of its market capitalization evaporate since hitting a high of $133.37 billion in April 2011 to a current market capitalization of $37.58 billion. Much like Exxon Mobil, its shares have seen relatively conservative play over the past several months, in the $90 to $100 range. With strong revenue growth (quarter-over-quarter growth of 43.40%), a solid profit margin of 25.76%, and net operating margin of 49.31%, the company represents a more attractive investment than many others in the sector. Despite the significant drop in market capitalization, the company's forward price-to-earnings ratio of 7.96 remains high compared to others in the industry but doesn't necessarily mean that the stock is overpriced.

Earlier this month the company completed its acquisition of Exxon Mobil's Beryl Field, along with other assets in the United Kingdom's North Sea. The acquisition will allow Apache to grow its North Sea business significantly which would greatly benefit earnings, cash flow and production.

Apache is likely to do well in coming quarters due to strong fundamentals and its recently completed acquisition of Beryl Field. In my opinion, this stock presents a great value for the mid to long-term at its current prices.

Source: 5 Oil And Gas Stocks Looking For A Strong 2012