National Oilwell Varco (NYSE: NOV), a buy in our 'Wildcatters portfolio,' will see outsized benefits from improving conditions in the global oil market," says Elliott Gue in The Energy Strategist.

Rig technology is the crown jewel of National  Oilwell’s business; the unit builds key equipment used on land and offshore drilling rigs, according to Gue.

"The unit is currently benefiting from the boom in deepwater drilling activity --  one of the only drilling markets that continue to see growth despite the decline in commodity prices this year," he said.

"Equipment used on deepwater drilling rigs is far more complex and expensive than that used on land or shallow-water rigs."

As a result, selling equipment into the deepwater market carries far higher profit margins for National, according to Gue.

"National Oilwell’s stock price did decline slightly following its first quarter earnings release in late April. That decline was a great buying opportunity. Since then, the stock has rebounded and recaptured its post-earnings decline and then some," he said.

"One potential ongoing catalyst for National Oilwell is a series of major deepwater oil projects being managed by Brazil’s national oil company, Petrobras."

According to him, Petrobras has announced several major discoveries over the past year and a half and should be releasing more data on the potential for these fields in coming months.

"Petrobras will need at least 28 new ultra-deepwater rigs to develop all of the fields it’s found, and a new ruling from the company’s government regulator may force it to accelerate the development of these fields," he said.

"This would, of course, mean more business for National Oilwell, a key supplier of equipment for such rigs. National Oilwell Varco remains a buy."