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There are several oil and gas stocks that are currently offering great value to investors - some with upside potential in the 30% range. One such company is SandRidge Energy (NYSE:SD), a real mover lately that is beginning to catch a lot of attention from analysts and investors alike.

In this article I discuss why I think that SandRidge is presenting a number of positive fundamentals that could make it a truly great buy, primarily as a growth play.

Analyzing the Numbers

SandRidge is an independent natural gas and oil company with a focus on exploration, development, and production on the Mid-Continent and Permian Basin as well as in the West Texas Overthrust, the Gulf of Mexico, and the Gulf Coast. The company's shares have been the talk of the proverbial town recently - at least in terms of possible dirt cheap stock bargains.

Although commodities have been taking a slight beating of late, SandRidge has been able to sidestep some of the IRS related fiascos that have come to light regarding some of its closest competitors.

SandRidge holds a market cap of over $3 billion and sports a fairly aggressive P/E ratio of just below 62. Fundamentally, SandRidge has a number of factors that are moving its shares in the right direction - and that also have the potential to move the shares quite a bit higher.

The company successfully bridged a funding gap by raising capital of $1 billion through the closing of a Royalty Trust on its Permian property. It hit its production targets of over 21,000 barrels equivalent per day. Spending is close to its guidance of $457 million per year.

In fact, a J.P Morgan report stated that based on a net asset value analysis, SandRidge is one of the cheapest stocks in its coverage universe. Recent trading in the $8 per share range has SandRidge shares holding at midway between its 52-week high and low prices of $12.36 and $4.55 respectively.

Is the Competition Gaining?

One similar operator in gas space, Chesapeake Energy (NYSE:CHK), has been gaining some unwanted attention recently. The number two gas producer has been cutting output via a cutback on lease acquisition, as well as selling more assets, in hopes of stemming a flood of supply - but so far, to no avail. The firm also plans to reduce its production growth rate from between 30 and 40% to 25% over the next 24 months.

In fact, due to the company's reduced drilling activity in both 2012 and 2013, there is a projected decline in Chesapeake's natural gas productive capacity of roughly 12% in 2013. This comes after an adjustment for estimated net voluntary production curtailments. SandRidge, however, is banking on a Mississippian age oil play in the Mid Continent area to provide significant growth over the next three years. This play - spread over a 17 million acre portion of Oklahoma and Kansas - was discovered by SandRidge before many other operators and has therefore been able to build up a position of two million acres in Oklahoma / Kansas area.

Despite this news, Chesapeake's shares have been trading just under $20 per share, moving away at least somewhat from its 52-week low of $16 and change. The company also offers investors a dividend of .35 per share, yielding 1.90%.

The company recently reported a net first quarter loss of $71 million or 11 cents per share. In addition, Chesapeake lowered its operating cash flow forecasts by nearly 48% for full year 2012 and 2013. Based on this, I'd steer clear of this one, at least in the near term.

Cabot Oil & Gas (NYSE:COG), an independent company has properties primarily located in Appalachia, south and east Texas, and Oklahoma. The company recently declared a regular dividend on the firm's common stock of two cents per share. This dividend will be paid out to all shareholders of record as of the close of business on May 15, 2012. This will offer investors a dividend yield of just over .20%.

Here, too, is a company with a somewhat aggressive price to earnings ratio of over 58. While the shares of Cabot have recently been trading in the mid-$30s, the addition of the company's 121 mile long pipeline - a pipeline that will essentially connect the production of natural gas in northeastern Pennsylvania with the company's northeastern markets, share price of Cabot will likely head upward.

Cabot is responsible for carrying roughly 500,000 dekatherms per day - supplemented by an additional 150,000 dekatherms per day that Southwestern Energy (NYSE:SWN) has already agreed to transport. While Williams Partners will own 75% of the pipeline, Cabot will own the remaining 25%.

Indeed, because of its position in the deal, Southwestern may soon be in play as a takeover target - and while this company's shares are trading at just over $32, there is room for some upward movement, especially if the takeover rumors come true.

Another relevant company to keep an eye on, Kodiak Oil & Gas (NYSE:KOG), may be off and running in terms of boosting it drilling production this year from 15,000 Bpd to 27,000 - translating into sales for 2012 of over $600 million and an EPS of 79 cents.

For 2013, due to Kodiak's production increases, the company is forecasting an increase in sales to $950 million with an EPS of $1.25. Overall, even if these targets fall a little short, Kodiak shares still represent a great value - at least as long as a large amount of share dilution does not occur.

The positive movements that are currently happening with Kodiak, coupled with the company's forecasted continued growth, lead me to believe that this could also be a nice addition to portfolios that are currently seeking more shares in the oil and gas arena.

The Bottom Line

With 20 analysts giving a mean consensus price target of just below $10.50, those who own SandRidge shares today - along with those who buy shares in the near term - could see a possible 30% increase in their investment over the next 12 to 24 months.

Source: SandRidge Energy: 30% Upside By 2014