Last May, I discussed the possibility of a turnaround for oil & gas exploration and production (E&P) companies. Higher production and cost control measures led to positive earnings estimate revisions.

Three months later, the trend continues. Production levels, particularly in the North Sea and the Middle East, are increasing. Costs continue to be reined in. And analysts are raising their full-year profit forecasts further. During the past few weeks, 292 profit forecasts have been increased.

Commodity Prices Playing A Role

Rising oil prices are helping. Though significantly down from last year (crude peaked at $147.27 on Jul 11, 2008), crude rebounded throughout the second quarter. Furthermore, given the likelihood of economic expansion in the coming months, it is probable that a floor for oil prices has been set.

Natural gas prices may have hit a bottom. Natural gas started the year at $6.50 per million BTU and fell

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div style="text-align: justify;"span style="font-weight: bold;"Brigham Exploration (NASDAQ:BEXP)/span is getting very positive comments this morning after the co last night issued an operations update and announced that the Strobeck 27-34 #1H well came online with an initial rate of 2,021 boe/d from the Three Forks/Sanish (TFS) zone:br /br /span style="font-weight: bold;"- Jefferies /spannotes the first of three wells scheduled for completion this summer achieved a new record for BEXP ... it is also the second highest Three Forks Sanish (TFS) test in N Dakota. The Strobeck 27-34 (63% NRI; Mountrail County) flowed 2,021 boepd during the first 24 hours from the TFS. BEXP's prior record was 1,433 boepd from the Bakken. The highest report TFS test is XTO's (XTO, $35.85, Buy) Boucher 41X-21 well in Williams County at 2,571 boepd.br /br /span style="font-weight: bold;"Demonstrates that longer laterals, more frac stages is working ... /spanthe Strobeck is 3 miles away from BEXP's ...

- Harry Cohen took over the Legg Mason Appreciations Fund in 1979; he is a value investor who tries to take a longer view of stocks. His partner is Scott Glasser, who joined him as a co-portfolio manager at the very end of 1995. They’ve guided the fund (ticker: SHAPX) to a solid long-term record, besting the S&P 500 over ten, five and three years. In a Barron’s interview,

They are positive on a few stocks:

a. Technology: The better performance has been driven by the higher-quality companies, international exposure, strong cyclical component. They like Cisco, IBM and Qualcomm

b. Other Stocks: Travelers, Newfield Exploration, Kimberly-Clark, DuPont, PPG Industries, and Kraft Foods. Though they all face headwinds, they will all become good stocks. And, they think their downside is limited. - Travelers has excellent management; it hasThey have a pristine balance sheet and, unlike ...