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Annotated article summary from this weekend's Barron's. Receive all our Barron's summaries by signing up here:

The New Drill Masters by Suzanne McGee

Summary: Companies that invent ways to find more oil, quicker, stand to gain from high energy prices and ever-depleting reserves. A recent study found companies able to markedly increase reserves were up 303% since 2003, vs. 159% for those not as adept. Apache (NYSE:APA) used 3-D seismic surveys to discover a 2.3 trillion cubic foot natural-gas field in Deepwater drilling 27 5 07Egypt. Morgan Stanley energy analyst Lloyd Byrne says EOG (NYSE:EOG), currently about $76, is worth $84 due to its horizontal drilling techniques that open up new natural-gas reserves in the otherwise difficult Barnett Shale region of Texas. Deep sea drilling holds the most potential to open up new reserves, but it's also the most expensive, giving time-saving technologies huge potential. Byrne likes Devon Energy (NYSE:DVN), whose extensive holdings in GoM deepwater, natural-gas shale and oil sands make it a big play on emerging technologies. Fidelity's John Dowd is watching oil-service companies that specialize in deepwater and sub-sea technologies like Cameron International (NYSE:CAM) and FMC Technologies (NYSE:FTI). Weatherford International (NYSE:WFT) now holds more oil-field technology patents than any company other than Halliburton (NYSE:HAL), and it dominates the 'underbalanced drilling' area. Giant Schlumberger's (NYSE:SLB) Q seismic technology uses sound waves to evaluate geological formations and faults; its high-quality surveys are unparalleled. While "elephant" discoveries may not be a good bet, there's still more "found" oil and gas for the taking than many skeptics believe; companies that facilitate its drilling will be rewarded accordingly.

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Source: Seven Oil Stocks to Power Your Portfolio - Barron's