Money Flowing Towards Oil Services

Big Oil is on a spending spree in the Gulf of Mexico.
A couple of months, the oil companies of the world spent more than $300 million on 18 million potentially oil rich acres in the Gulf of Mexico. The U.S. Mineral Management service packaged the acreage, located off the Texas coast, into 282 tracts.
The big winner was British Petroleum, which scooped up 91 tracts and spent $31 million. The big spender was Norway's Statoil, which paid more than $138 million for 36 tracts.
The opportunity of giant fields in the Gulf drew 47 companies to the auction. This list is interesting because it includes some quasi-state owned oil companies, such as Statoil and Brazil's Petrobras. In fact, these two companies are relative newcomers to the Gulf of Mexico.
Neither company is new to offshore drilling, though. Petrobras is one of the world's best deepwater drilling outfits... and currently operates 40 offshore drilling rigs, primarily off the coast of Brazil. The company has a single rig drilling in the Gulf of Mexico, Rowan's Bob Palmer. Statoil operates 24 offshore rigs, but none in the Gulf of Mexico.
There's a great reason the Gulf of Mexico is getting all this attention. It's one of the few remaining regions in the world with huge potential, and is owned by a government that doesn't claim the oil. Quite the opposite, the United States embraces competition for the oil. Also there is little risk aside from Hurricanes, people wont be trying to take workers hostage like in Nigeria, and there is less political risk as well.
So why not by the big oil companies? You have to understand that these are huge projects and they long time to complete. It will take years for you to see a return on their balance sheets.
However, if you invest in the service companies that immediately benefit from these deepwater spending sprees you'll continue to see terrific returns over the next six months to several years. As Big Oil continues to spend that money, the service companies are going to be the beneficiary for years to come.
Some ways to play this field are ETF’s and stocks. The ETF (XES) and (PXJ) are a basket of stocks in the oil services sector. Large caps with good fundamentals include Transocean (RIG), Shlumberger (SLB. A smaller comapny the the former two and in my thinking the best pick is National Oilwell (NOV) the stock is the most undervalued in the group and is growing EPS at >20%. MID cap, best play is CAM excellent management and growth. There are some riskier smaller companies like FTI, GRP and FTK if some wants a smaller cap plays.