Gulf of Mexico Drilling Permits Back On

Talk about fast…

Those American Express (AXP) July 2011 44 calls I was telling you about last week are already up more than 30%… and still breaking out of that consolidation pattern.

And that’s not the only way to turn a quick buck these days — not by a long shot.

But you have to act quickly…

This news won’t wait for hesitant investors.

Drill, Baby, Drill

Take a look at the deep water drillers that are now being allowed to continue drilling in the Gulf of Mexico:

• When Noble Energy (NBL) was given the green light by the Obama Administration, the stock ran from a low of $86 to more than $94. This was the first company to receive approval for drilling again in the Gulf. This is one of the strongest companies in the area, and should be able to continue its respectable uptrend.

• When BHP Billiton (BHP) got the go-ahead, the stock ran from a low of about $84 to more than $90. The company will be drilling at the Shenzi field in the Gulf of Mexico. 

• And when ATP Oil & Gas (ATGP) was given the all clear, the stock ran from about $16 to more than $19. ATPG will now be able to continue with the final phase of drilling at the Telemark Hub, 90 miles south of Venice, Louisiana.

And we don’t intend to miss the next one…

About a year after the Deepwater Horizon disaster claimed hundreds of lives and destroyed economic growth, there’s news that more permits will be issued within days, according to the Bureau of Ocean Energy Management, Regulation and Enforcement.

And we’re backing up the truck.

As hesitant as the Obama Administration may be, they don’t have much of a choice any more…

Unless, of course, they like the growing opposition over rocketing oil and flack from the very judge that shot down Obama’s drilling ban and gave the Bureau just 30 days to act on permits.

The judge wrote:

Nearly a year after the spill occurred, delays, particularly those of the length at issue here, become increasingly unreasonable…

The permitting backlog becomes increasingly inexcusable. Perhaps it is reasonable for permit applications to wait more than two weeks in a necessarily more regulated environment.

Delays of four months and more in the permitting process, however, are unreasonable, unacceptable, and unjustified by the evidence before the Court.

Despite everything, if permit approvals are allowed to move forward, here are some of the companies that could make up for lost production and prosper from abandoned projects:

• Transocean (RIG)
• Hercles Offshore (HERO)
• Seadrill (SDRL)
• Ensco (ESV)
• Rowan Companies (RDC)
• Helix (HLX), which provides one of two oil-spill response systems

As oil prices continue to rise on continual chaos in the Middle East and Northern Africa, we don’t have any other choice but to drill for oil wherever we can find it.

And with Libyan oil fields in disarray and uncertainty over future Middle East production, it’s not as if we can ignore deep water oil.

If you think the Saudis or anyone else can keep a lid on prices, you’re gravely mistaken. Any turmoil in Saudi Arabia, Iran, or Kuwait would easily drive oil to $150 a barrel — sharply disrupting our “recovering” economy.

Allowing drilling to resume in the Gulf would calm oil markets and bring down prices.

In fact if you look at when the moratorium first began in May of last year to the end of 2010, pump prices jumped more than 35 cents. 

Let’s face it, folks: We either suffer through $4 pump prices because of some Mid East jackasses, or we dig for more — which more than 60% of Americans want. 

My advice? Buy the above-mentioned stocks… and wait.

Or, if you’re ultra-bullish on oil drillers, you can even pick up SPDR S&P Oil & Gas Exploration (XOP), which includes holdings like Holly Corporation (HOC), Chesapeake (CHK), and Tesoro Corporation (TSO).

Note: If XOP can break above its double top, I wouldn’t be shocked to see a challenge of 2008 highs of $70.

Stay Ahead of the Herd,

Ian L. Cooper
Editor, Wealth Daily