Every week, the numbers have added up as the U.S. drilling rig count continues to drop. With that decline there has also been a significant drop in production, and as things stand now, the production decline should continue into the fourth quarter of this year. In a new research report, Cowen sees the rig count starting to climb in 2016 in an effort to maintain 2015 exit production levels.

The Cowen team has put together a ton of data from energy firms, and they have determined that another 250 to 300 rigs are required to meet 2016 Wall Street growth targets. The analysts’ base model assumes an additional 300 rigs will be added through end of 2016 from current levels. So the energy story remains a cautious, but potentially positive one to buy going forward.

The Cowen analysts stay defensive and have four stocks to buy now. They are taking advantage of pullbacks in share prices and have two companies they favor for direct exposure to crude oil.

Anadarko Petroleum

The Cowen team likes this company on the steep pullback in price over the past month. Anadarko Petroleum Corp. (NYSE: APC) is one of the world’s largest independent exploration and production companies, with exploration or production work in all major domestic drilling areas, as well as in South America, Africa, Asia and New Zealand. As of year-end 2014, the company had approximately 2.86 billion barrels-equivalent of proved reserves.

Top Wall Street analysts see the company growing at or above 15% total production from the higher margin portions of their portfolio, which in turn could end up boosting the firm’s West Texas Intermediate (WTI) price realizations. In other words, more oil equals more money.

Recent chatter has suggests the company may be a good bolt-on fit for Exxon. Anadarko has outstanding assets in the Gulf of Mexico, U.S. shales and Africa, including a large presence in gas discoveries off the coast of Mozambique.

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Anadarko investors are paid a 1.3% dividend. The Cowen price target on the stock, which is rated Buy, is a very impressive $119. The Thomson/First Call consensus price target is much lower at $101.91. The stock closed Wednesday at $83.03.

Continental Resources

This company is a Cowen favorite for exposure to crude oil. Continental Resources Inc. (NYSE: CLR) is a top 10 independent oil producer in the United States. It is the largest leaseholder and one of the largest producers in the nation’s premier oil field, the Bakken play of North Dakota and Montana. The company also has significant positions in Oklahoma, including its SCOOP Woodford and SCOOP Springer discoveries and the Northwest Cana play.

Continental posted outstanding first-quarter earnings and surprised many when actual production exceeded analysts’ consensus estimates by 1%. In fact, the company’s production in the U.S. unconventional shales increased significantly in the first quarter of this year, over the same quarter in 2014. Continental might also be viewed as a favorable takeover candidate.

Cowen has the stock rated Market Perform with a $56 price target. The consensus target is $54.34. Shares closed Wednesday at $46.39.

Noble Energy

This is another company the Cowen team likes on the sharp price pullback. Noble Energy Inc. (NYSE: NBL) has the majority of its production in the form of natural gas and that certainly helps to hedge against falling oil prices, especially when we have brutal winters and very hot summers. Noble is also one of the many American firms expected to benefit when Mexico opens the door for exploration and production from outside companies for the first time in 70 years.

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The company’s Aphrodite natural gas reserve off Cyprus was declared commercially viable recently. Cyprus discovered offshore gas in 2011 and has sought to develop the energy sector to bolster an economy that relies mostly on tourism, business services and shipping.

Investors are paid a 1.6% dividend. The Cowen price objective is $63, and the consensus target is much lower at $54.26. The stock closed most recently at $44.91 a share.

Pioneer Natural Resources

This is another stock the Cowen analysts like for a pure crude oil play. Pioneer Natural Resources Co. (NYSE: PXD) was the ultimate shale-oil growth story for the past five years, and it was eviscerated in the sell-off that started last summer. The stock has recently declined over 15% and also offers investors a better entry point.

Pioneer is a huge player in the Permian basin and the Eagle Ford in Texas, and the company owns more than 20,000 locations in the world’s second largest oil reservoir in the Midland Basin. In addition, the company owns its own frac fleets, allowing Pioneer to be a low-cost, high-margin producer, which could prove to be huge with prices lower for a protracted period.

Pioneer was also one of the firms named by the U.S. Commerce Department to produce and export condensate. With a big secondary last November and more asset sales on tap, the company could have balance sheet debt close to zero this year.

Pioneer investors are paid a tiny 0.5% dividend. While the Cowen price target is $216, the consensus is set at $182.81. Pioneer closed trading on Wednesday at $145.47.

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Oil eventually will rally higher, with increasing third world demand, a very unstable Middle East and production levels dropping fast, the tide eventually will change. Investors should scale in money to these top stocks to buy, as another leg down is always possible.

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