Cameron International Corporation (CAM), Oceaneering International (OII): Three Ideal Ways to Make a Splash in Deepwater

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For much of the past century, technological advances in locating and producing oil -- gas was essentially a byproduct during most of that time -- came at a relatively slow, steady rate. Since then, as you know, two key approaches have been developed to vastly enhance our ability to increase the output of both crude oil and natural gas.

Obviously, one of these innovations is fracking, which has permitted us to coax gas and oil from previously impenetrable shale formations. The other is the ability to drill for and produce oil in the ultra-deepwater, 7,500 feet or deeper. In addition to far more sophisticated and costly rigs, working in the ultra-deepwater requires new ways to complete and produce from deep wells, along with the capability of attending to, troubleshooting, inspecting, and repairing downhole and subsea equipment nearly two miles beneath the sea's surface.

Access to the ultra-deepwater has breathed new life into the once declining Gulf of Mexico, and has facilitated major activity in places like offshore Brazil and West Africa. The importance of the deepwater can only increase, making it vital for energy investors to keep abreast of those companies that make things happen way down low. Let's take a look at three of the leaders:

Cameron International Corporation
Cameron International Corporation (NYSE:CAM)

As with many oil-field service companies, Houston-based Cameron International Corporation (NYSE:CAM) is the survivor of several mergers. Today, Cameron International Corporation (NYSE:CAM) manufactures a host of valves, pumps, wellheads, risers and other equipment used in drilling and production. Perhaps more importantly, it makes components for land and offshore rigs, along with subsea production systems and all-important blowout preventers.

As June came to an end, the company finalized a joint venture, OneSubsea, with Schlumberger Limited. (NYSE:SLB). The intriguing partnership -- in which Cameron International Corporation (NYSE:CAM) has a 60% interest, with the remainder Schlumberger Limited. (NYSE:SLB)'s -- will develop products, systems, and services for the subsea oil and gas market.

Cameron International Corporation (NYSE:CAM)'s market capitalization is approximately $16 billion. The company is rated better than a buy by the analysts who follow it.

National-Oilwell Varco, Inc. (NYSE:NOV)

The product offerings of National-Oilwell Varco, Inc. (NYSE:NOV), the favorite of many energy investors, overlap in several areas with Cameron International Corporation (NYSE:CAM)'s. For instance, Varco provides an array of components and equipment for drilling rigs, including derricks, cranes, and pipe-handling equipment. It also manufactures blowout preventers.

When it reports its quarterly results on July 30, National-Oilwell Varco, Inc. (NYSE:NOV) is expected to slide on an earnings per share basis to about $1.33, or down $0.13 year over year. It's dip, should it occur, will be partially tied to the process of digesting a host of acquisitions made during the past several years. Perhaps a more important number for the first quarter of 2013 was an impressive 8% backlog increase. That's a metric that clearly should be monitored in the upcoming report.

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