Five Mid-Cap Oil Stocks to Love In 2012

When it comes to oil stocks, the large-cap names often have a way of dominating the headlines. That's just the lay of the land when talking about companies like Exxon Mobil XOM, Chevron CVX and others that have 12-digit market caps. However, lots of press doesn't always equal lots of profits and while large-cap integrated oil stocks are known quantities, many with reliable dividends, they're not the whole story when it comes to investing in the oil patch. In fact, the mid-cap universe is far from short on compelling oil plays for the year ahead. Actually, we found enough mid-cap oil stocks with growth potential in the year ahead that there easily could be a sequel to this piece, but we'll start with five for now. Here are the first five mid-cap oil stocks to consider embracing in 2012. Kosmos Energy KOS: We're not going to lie. Kosmos Energy, which came public in May, has an ugly chart and the stock has tumbled 33% since its IPO. Actually, the IPO was kind of forced after the government of Ghana scuttled a takeover attempt of Kosmos by Exxon last year Then Kosmos rejected a takeover overture from BP BP and Cnooc CEO earlier this year. Still, Kosmos is a major player in Ghana's Jubilee Field and that field is believed to have as much as 1.8 billion of recoverable reserves. So yes, Kosmos could still be considered a takeover target. Cobalt Energy CIE: Heading into the start of trading today, Cobalt was up almost 6% year-to-date, but that number is going to look a lot better following positive analyst chatter from Goldman Sachs and Morgan Stanley. Morgan Stanley has a $19 price target on the stock, which is well above current levels. We'll take the Goldman upgrade with a grain of salt since the bank is major Cobalt investor, but there is no denying Cobalt may be sitting on a massive oil reserves in Angola, one of the most oil-rich African country. Chances are the company will need a larger partner to tap those reserves. That could mean that larger partner doesn't want to share and just buys Cobalt outright. That's speculation at this point, but not out of the realm of possibility, either. Core Laboratories CLB: The Dutch oil services firm can say a couple of things a lot of other stocks cannot say: It's up more than 32% year-to-date and it's less than 4% off its 52-week high. At a forward P/E of almost 25, Core Labs is expensive compared to larger oil services like Schlumberger SLB, but Core has also sharply outperformed its more well-known and bigger rivals. Maybe the valuation is justified heading into 2012. Rowan Cos. RDC: We already highlighted some legitimate energy sector takeover targets. Rowan could easily have been on that list as the drilling services provider is frequently kicked around as a possible target. The company had almost $893 million in cash and cash equivalents at the end of Q3. Ultra Petroleum UPL: As was the case with Kosmos, we're not going to sugar-coat things with Ultra. The stock has been slammed this year, losing 39% of its value. The good news is Ultra is a Marcellus Shale play and the company's Green River Basin properties in Wyoming could prove lucrative. The stock could go to $53 and that's huge upside from current levels.