With the markets fighting for direction around the international scene and with coming interest rate hikes, 24/7 Wall St. often takes a long view of opportunities beyond the near-term noise that the financial media pushes toward investors. This brings an interesting position in the battered oil and gas sector. Most companies in the oil patch have seen their shares gutted since the oil drop began in 2014, to the point that many investors and analysts are looking for solid buying opportunities for those investors who can take a view into 2016 and beyond.

One key driver for long-term upside is that the oil players with better balance sheets are able to be far more selective in projects now. Another driver is that, while production and new projects have been trimmed, production costs have been brought down sharply. This leaves the breakeven rate much lower than just a year ago.

In the past week, analysts from various reputable firms have made several upgrades or positive calls on some of the key oil and gas outfits that are based in the United States. We also could not ignore that U.S. rig counts finally grew after six months of steady decline. Some of the implied upside to the target prices is far higher than the traditional 10% or so seen for Dow Jones Industrial Average stocks.

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Apache Corp. (NYSE: APA) was recently featured in a group of four picks from RBC Capital Markets to win in oil and gas. Apache operates onshore and offshore in the United States, Canada, North Africa, Australia and offshore in the United Kingdom via the North Sea. The RBC team says that Apache should be adding an additional five rigs this year, and it recently has beaten earnings estimates. Apache investors are paid a 1.75% dividend. The consensus analyst price target is $70.72, and shares closed out the week at $56.78, for an implied upside of almost 25%, if you include its dividend.

Carrizo Oil & Gas Inc. (NASDAQ: CRZO) was given a huge upside call at SunTrust Robinson Humphrey last week. The company is focused in proven, producing oil and gas plays, primarily in the Eagle Ford Shale, the Utica Shale in Ohio, the Niobrara Formation in Colorado and the Marcellus Shale in Pennsylvania. SunTrust was super-positive on its Eagle Ford play, with a price target of $65.00, implying upside of over 40%. Carrizo’s consensus analyst target is $60.75, and it has a 52-week range of $31.70 to $69.35 and a $2.3 billion market cap.

EOG Resources Inc. (NYSE: EOG) was recently added to the UBS Equity Focus List. EOG was touted for its plays in the Eagle Ford Shale and in the Bakken and Permian Basins, with a potential merger target being cited, which could exceed $50 billion, versus a $47 billion value today. UBS added EOG with its recent energy sector upgrade, and with EOG being a high-quality, low-cost U.S. shale oil producer. The UBS price target for the stock is $96.00, lower than the consensus price target of almost $102.00. Shares closed most recently at $85.67, leaving implied upside of 12% to the UBS target and almost 19% to the consensus price target.

Kosmos Energy Ltd. (NYSE: KOS) was raised to Outperform from Market Perform with a $10 price target at BMO Capital Markets on Thursday. Kosmos Energy explores for and produces oil and gas in Africa, Europe and South America. BMO’s $10 target implied more than 25% upside from the prior $7.93 close, but Kosmos closed out the week at $8.08. If it has a 52-week range of $6.96 to $11.08 and a consensus price target north of $11.00, does $10.00 seem unreasonable? We will have to wait and see what this $3 billion outfit can do for shareholders.

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Alliance Resource Partners L.P. (NASDAQ: ARLP) was raised to Buy from Hold at Deutsche Bank. What will seem odd about this upgrade is that Deutsche Bank’s price target was cut to $36 from $41 in the call. Still, this compares to a prior $25.02 close and was even higher if you use the $24.85 close from Thursday. This is one of the master limited partnerships with a distribution of over 10%, and it has a 52-week range of $23.67 to $53.84.

Several other issues have been out in the oil patch of late:

• U.S. rig counts finally grew!
• Natural gas prices ticked up on inventory news.
• Did BP get off easy in its $18.7 billion Gulf of Mexico settlement?
• Is Schlumberger still best in class?
• Petrobras is cutting capex by nearly 40%.
• Should Williams be getting downgraded?

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