$40? $50? $60? Nobody really knows where the price of oil will stabilize in coming quarters.

#-ad_banner-#And the eventual upturn? Supply destruction is taking place right now, which will eventually push oil prices back above $80, but that process may take several years to play out.

Against such a backdrop, it’s quite tricky to peg a current fair value for the companies that produce oil and gas. They’ll be solid values when oil starts to rebound, but could also be dead money if oil prices stay in the current range for many quarters to come.

One area that does hold the potential for a solid and rapid rebound is the companies that provide services to the energy producers. The simple reason: some of them are now trading far below tangible book value. If they retain sufficiently strong balance sheets and generate at least break-even cash flow in 2015, then stable energy prices should remove the current panicky atmosphere enough for these stocks to be valued at least in line with their net assets.

Here are three energy services providers that look vastly oversold and are starting to attract value investors.

McDermott International, Inc. (NYSE: MDR)
This global services provider doesn’t have the heft of bigger rivals such as Schlumberger Ltd. (NYSE: SLB) and Halliburton Co. (NYSE: HAL). Those firms generated a combined $70 billion in revenue in 2014, while McDermott generated just $2.2 billion in annual revenue. A few years back, even that small revenue base was unprofitable, as previous management entered into a string of money-losing long-term contracts.

But new management at McDermott has been working hard to fix this business, though the current energy industry problems may be masking such efforts. Shares have fallen by two-thirds from the 52-week high, and the company’s current market value is $610 million. Compare that to $1.5 billion in tangible book value.

Shares of McDermott recently came under renewed pressure when analysts at UBS downgraded the stock to neutral, citing revenue and debt covenant concerns.

Yet here’s the unusual thing: as of September 30, 2014, the company had $883 million in cash, with only $300 million in loans coming due over the next four years. This is not a company at risk of having its loans called in.

Management will release the 2015 financial outlook in early March, but based on a range of cost-saving initiatives spelled out in recent quarters, McDermott is very likely to predict positive cash flow in 2015. The factor alone should help put debt covenant concerns to bed, allowing investors to re-focus on this stock’s sharp discount to tangible book value.

Atwood Oceanics, Inc. (NYSE: ATW)
This provider of drilling rigs has seen its market value shrink from $3.7 billion last summer to a recent $1.85 billion. Compare that to tangible book value of $2.55 billion.

To be sure, this isn’t an ideal time to own and lease drilling rigs. New contract signings in 2015 are likely to remain subpar. But Atwood was wise (or lucky) enough to sign most of its rigs to long-term contracts before the industry began to slump. That’s why it’s the only rig provider in which Goldman Sachs retained a buy rating. 

In a bit of irony, Atwood is the rare industry beneficiary of lower oil prices, as the company’s fuel and labor costs will now start to see relief. Analysts expect Atwood to earn $5.00-to-$6.50 a share in fiscal (September) 2015 and 2016. Shares at a recent $29, translate into extremely low price-to-earnings ratios, in addition to that price-to-book valuation gap. Might that weak valuation put the company in play? Analysts at Jefferies note that “ATW’s young, high-spec fleet would provide an immediate high-grade to a potential buyer and the strong backlog takes some risk off the table.

Hornbeck Offshore Services, Inc. (NYSE: HOS)
This company is a rival to Atwood Oceanics. It doesn’t have the same kind of locked-in contract coverage, but its shares sell at an even stepper discount to tangible book value — a ratio of 0.60.

To be sure, lease renewal rates are already having an impact. Analysts now see Hornbeck earning around $2.50 a share this year, down from estimate of $3.50 a share a few months ago. Shares trade for about nine times that view.

Roughly three months ago, after shares had already begun a precipitous slide, Hornbeck announced a $150 million share buyback program. Such a move always makes sense when shares trade so far below book value. The status of the buyback, along with other financial topics, will likely be in focus when Hornbeck discusses its 2015 outlook on February 11.

Risks To Consider: The  big risk here is an obvious one: an even steeper drop in oil prices, which would likely lead to panic selling for virtually every kind of energy stock.  

Action To Take –> Many energy stocks have begun to rebound off of their lows simply because oil prices are no longer in freefall, but it’s too soon to call for a further rebound in energy prices. Many energy stocks may stay range bound in coming quarters. Yet the stocks that are valued at a sharp discount to book value, appear primed for imminent upside, especially as they spell out their cash flow forecasts for 2015. All three of these firms appear poised for positive cash flow in 2015, and McDermott International, in particular, trading at around 40% of tangible book value, appears especially undervalued.  

If oil, natural resources or commodities are what interests you, look no further than StreetAuthority’s Scarcity & Real Wealth. Our resident natural resources expert Dave Forest has more than a decade’s experience as a trained geologist and analyst. His industry insight allows him to read the markets and provide the most timely, potentially lucrative advice for everything from oil and gold to molybdenum. To gain access to Dave’s latest research, click here.