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In spite of many concerns, in particular the European debt crisis, the markets have been climbing a wall of worry. Oil has remained surprisingly resilient, hovering around the $100 per barrel level. Even when the stock market corrected and the world seemed as if it was falling apart, oil continued to show relative strength. Oil has probably been boosted by the massive amount of money printing that central bankers have engaged in for a while. Easy money policies tend to create investor demand for hard assets like gold and oil because governments can't print those assets like they can print money.

Recent economic data from Germany, China and the United States indicates that the global economy might not be in as bad of shape as many have expected. Factory orders in Germany and China are showing strength and the U.S. is seeing improvement in the unemployment rate. All of this could indicate that oil is poised to rise over the next few years, and that means that most oil stocks are probably not going significantly lower. Many oil stocks are still trading well below the 52 week highs and offer investors a chance for large gains as soon as the economy starts firing on all cylinders. Once the economy begins to show consistent strength, oil is likely to trade sustainably over $125 per barrel. Here are a few oil stocks, trading below $20 per share, that are poised to double over the next couple of years:

Weatherford International, Ltd. (NYSE:WFT) provides maintenance services and equipment for the oil and gas industry. Analysts expect revenues and profits to surge in the coming year with revenues potentially jumping from about $12.85 billion to around $15.17 billion in 2012. Earnings are expected to soar from 86 cents per share in 2011 to about $1.54 in 2012. This stock looks undervalued based on growth and also on book value, which is $13.09 per share. Weatherford is based in Switzerland and the company has a solid balance sheet. In 2008, this stock traded for about $50 per share. When oil gets past $125 per barrel, this stock could easily trade for about $35 per share-- which would be just about double from current levels, and yet still way below the 2008 high.

Here are some key points for WFT:

  • Current share price: $17.61
  • The 52 week range is $10.85 to $26.25
  • Earnings estimates for 2011: 86 cents per share
  • Earnings estimates for 2012: $1.54 per share
  • Annual dividend: none

Key Energy Services, Inc. (NYSE:KEG) is based in Texas and provides services such as maintenance, drilling, etc., to the oil and gas industry. This company is expected to see fast growth with revenues estimates coming in at $1.86 billion for 2011, and rising to about $2.35 billion for 2012. Rising revenues are expected to boost profits to around $1.63 per share for 2012. This gives the stock a very reasonable price to earnings ratio of less than 10 times earnings. The company has a solid balance sheet and the book value is $7.60 per share. Key Energy shares have been in an uptrend since October, so buying on dips continues to make sense.

Here are some key points for KEG:

  • Current share price: $15.19
  • The 52 week range is $8.27 to $20.77
  • Earnings estimates for 2011: 95 cents per share
  • Earnings estimates for 2012: $1.63 per share
  • Annual dividend: none

Nabors Industries, Ltd. (NYSE:NBR) is based in Bermuda and it provides land drilling, fracking, engineering, transportation and other services to the oil and gas industry. Analysts expect strong growth with 2011 revenue estimates at about $6.13 billion jumping to around $7.41 billion. Profits are also expected to surge about 50% in 2012 as well. This stock traded at about $50 per share in 2008, and as the price of oil strengthens over the next couple of years, this stock should be able to double to the $40 level, which would still be significantly below the all time high.

Here are some key points for NBR:

  • Current share price: $19.60
  • The 52 week range is $11.05 to $32.47
  • Earnings estimates for 2011: $1.46 per share
  • Earnings estimates for 2012: $2.26 per share
  • Annual dividend: none

Magnum Hunter Resources Corporation (NYSE:MHR) is an oil and gas exploration company seeing major growth. It recently announced that production surged over 400% in the fourth quarter and it raised guidance for 2012, to about 15,000 barrels of oil equivalent per day. Magnum has high-potential projects in located in the Marcellus and Eagle Ford Shale areas and in West Virginia, North Dakota, Texas, and Louisiana as well. This stock is in an uptrend, so buying on dips when the market or oil prices correct should continue to reward investors. This stock has already doubled of the recent lows, but with the type of growth it is seeing, it is just a matter of time before it can double again.

Here are some key points for MHR:

  • Current share price: $6.45
  • The 52 week range is $2.33 to $8.66
  • Earnings estimates for 2011: a loss of 15 cents per share
  • Earnings estimates for 2012: a profit of 7 cents per share
  • Annual dividend: none

Kodiak Oil & Gas Corp. (NYSE:KOG) is a Colorado-based oil and gas exploration and development company. This company is developing projects in Bakken shale-rich areas such as the Williston Basin in Montana and North Dakota. It also has natural gas projects in Wyoming and Colorado. This company recently announced that production in the fourth quarter surged about 500%. Kodiak also expects strong growth in 2012 with production estimated at about 22,000 and 24,000 barrels of oil equivalent per day. Buying Kodiak shares on dips is paying off and the stock remains in a solid uptrend. Based on revenue and production growth, this stock could double in the next year or two.

Here are some key points for KOG:

  • Current share price: $8.84
  • The 52 week range is $3.59 to $10.41
  • Earnings estimates for 2011: 22 cents per share
  • Earnings estimates for 2012: 99 cents per share
  • Annual dividend: none

Abraxas Petroleum Corporation (NASDAQ:AXAS) is a Texas-based independent oil and gas exploration and production company. Abraxas has projects located in Alberta, Canada and the Rocky Mountains, Permian Basin, and Gulf Coast areas.
This is another small but fast-growing oil company. Analysts expect revenues to surge from about $70 million in 2011 to around $105 million in 2012. That's about 50% growth in just one year, so it's easy to see how Abraxas shares could double in value in the next couple years, especially if oil rises above $125 per barrel.

Here are some key points for AXAS:

  • Current share price: $3.99
  • The 52 week range is $1.86 to $6.16
  • Earnings estimates for 2011: 11 cents per share
  • Earnings estimates for 2012: 29 cents per share
  • Annual dividend: none

Data is sourced from Yahoo Finance. No guarantees or representations are made. Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.

Source: 6 Oil Stocks Below $20 Which Are Poised To Double