Is Heckmann Corporation (HEK) the Perfect Penny Stock? – Chesapeake Energy Corporation (CHK), SandRidge Energy (SD)

It helps explain why drillers such as Chesapeake Energy Corporation (NYSE:CHK) and SandRidge Energy Inc. (NYSE:SD) have largely abandoned gas drilling for the more lucrative oil and liquids markets. Indeed, SandRidge Energy (NYSE:SD) hardly even mentions gas on its website anymore, focusing instead on the opportunities oil represents.

Bakken not rockin’ so much
In its fourth-quarter earnings report released the other day, Heckmann Corporation (NYSE:HEK) said both the Bakken and Haynesville shale regions continue to experience declining activity levels, though the Bakken did better than expected even though capex spending in the back half of the year was restrained because of the greater efficiencies that drillers were experiencing.

But the weak pricing environment still forced Heckmann to reduce its costs in the Haynesville region, though the Marcellus, Utica, and Eagle Ford shale areas seem to be picking up. Heckmann Corporation (NYSE:HEK) says it will refocus much of its attention to those regions.

Eating your own cooking
Between rising oil prices and the potential for continued production of gas, Heckmann believes conditions are such that 2013 is shaping up to be a very good year. There may be an opportunity as well to expand its reclamation service, as new regulations have gone into effect preventing use of reserve pits for oil disposal. Skimming oil from sand, mud, and other places not usually thought of could become a very lucrative niche business in a few years.

Chesapeake Energy Corporation (NYSE:CHK) represented 25% of Heckmann’s revenues in 2011, and the driller has indicated that both the Utica and Marcellus shales — where the water-treatment specialist is seeing its greatest growth — will see even more production there this year.

Having transitioned from a gas-centric business to an oil-centric one like its customers, I find Heckmann Corporation (NYSE:HEK) to be a heckuva investment opportunity, though it may require some patience before investors realize the biggest profit.

The article Is Heckmann the Perfect Penny Stock? originally appeared on Fool.com and is written by Rich Duprey.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Total, owns shares of Apache and Heckmann, and has options on Heckmann.

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