THE SPECIAL FORCES OF THE OIL INDUSTRY

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

Acergy is in the right business at the right time. The Oil & Gas Equipment and Services sector has been one of the hottest areas in Global Bull Markets over the past year. Think of the ExxonMobil’s and Chevrons of the world as of the world as the miners digging for the gold, or in this case, oil. Acergy is the company that not only provides the picks and shovels, but also builds the mine — and in regions where few dare to tread.

It’s no secret that oil majors are running out of oil. That means that they have to look for oil in ever-more harsh and challenging –that means mostly offshore — environments. With a projected 185% increase in barrels of oil recovered from deepwater subsea markets over the next few years, Acergy’s area of specialty, it is set to benefit handsomely.

Indeed, it already is. Acergy’s recent numbers blew past market estimates with the force of a gale force wind. Revenue in Q1 jumped 55%. It earned $74 million, or 37 cents per share, compared with $10.8 million, or 6 cents per share, a year ago. That’s a whopping 600%+ increase. Acergy’s top line is also growing strongly with the company now forecasting 2006 net operating revenues of $2.1 billion.

The truth is, Acergy has more business than it can handle. Its backlog climbed more than 40% this year. This includes projects stretching to beyond 2010 with the likes of blue chip clients like Exxon Mobil and Chevron. And more than 70% of these contracts are $100+ million revenue projects. A recent example? Acergy was just awarded a $125 million contract for a deepwater installation project in offshore Angola. And it can’t even get started on that project until 2008.

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Usually, highly profitable businesses like Acergy’s attract competition. But just as you can’t replace the Special Forces with a batch of raw recruits, you can’t replace Acergy’s sophisticated project management experience overnight either. That means as long as the search for oil intensifies, Acegy’s business will continue to grow by leaps and bounds.

So buy Acergy (ACGY) at market today, and place your stop at $11.20. For even potentially bigger profits, buy the November $15 call options (QLSKC.X).

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