By S.R. Nunnally

The second company in our OCS drilling series I'd like to highlight is Oceaneering International, Inc. (OII:NYSE).

This company has a variety of business opportunities, but its main focus is providing services and products, like built-to-order specialty hardware and mobile offshore production systems, to the oil and gas industry.

With subsea projects ranging from the installation of subsea tiebacks to supporting pipe-laying operations, OII has the capabilities and expertise that the oil industry highly values.

In fact, I'd go so far as to say the types of services that OII (and nearly every other company we'll talk about in this series) provides are absolutely essential to the growth of the offshore drilling and exploration sectors.

OII's edge is that the company is leveraged to deepwater and subsea projects. That makes it valuable to not only Outer Continental Shelf drilling, but deepwater drilling, like in areas where Chevron, et al, made its huge oil discovery with the deepest well drilled yet.

The company expects its subsea projects to triple by 2010, to 3,825. In order to meet these needs, OII has been expanding operations. As of June 2006, OII had 32 drilling rigs on order. That means the company is increasing its fleet size and utilization.

But the growth doesn't stop there.

Subsea product values are expected to triple as well. With demand as a driving factor, OII's products could reach a value of nearly $3.5 billion in 2008. And its backlog continues to grow.

Here's the icing on the cake for me, though. OII has been contracted to help with the continuing cleanup after the two massive hurricanes last summer.

In March, OII received a $50 million, two-year services contract.

All this translates into greater revenues for the company. In fact, it's experiencing a record year so far in 2006.

The first three quarters on 2005 showed a gross profit of $123.104 million. And in 2006, the first three quarters pulled in gross profits of $220.499 million, an increase of 79%!

Like Tidewater, Inc. (TDW:NYSE) from yesterday's report, OII will soon be testing its all-time high of $47.23 from back in July 2006. And that's on the low side of where most analysts think OII is going.

Want my take? OII will test its all-time high in the next three months, if not sooner. Longer-term, OII could hit $57 in the next eight months.