By KATHLEEN GALLAGHER

Steve Lilly has historically shied away from stocks of exploration and production companies.

As a Midwestern generalist investor, he figured that he would be operating without the latest information.

"We're not at the country clubs and health clubs in Houston hearing what's going on," said Lilly, a portfolio manager at Cortina Asset Management LLC in Milwaukee.

Technological leaps have changed the way Lilly looks at things.

Horizontal drilling has given companies the ability to drill down 8,000 to 10,000 feet, make a 90-degree turn and drill as far as they need to go. Hydraulic fracturing involves pumping thousands of pounds of hydraulic pressure into a drilled hole to create cracks and perforations that allow oil and gas to flow more freely.

These innovations have opened up vast opportunities in shale rock formations that date back to the age of dinosaurs, and they have created overnight millionaires out of farmers in places such as Louisiana and North Dakota.

Consequently, the U.S. has gone from an under-supply to an abundance of natural gas, and there's a lot more incentive to drill for gas and oil on dry land in the U.S. The drilling success rate for shales has been close to 100%, much higher than with conventional wells, Lilly said.

He and his colleagues at Cortina evaluated many ways investors might make money on a shale play. Pipeline construction companies are one promising area because their conduits move gas and oil from production sites to where the demand is. The newfound abundance of natural gas makes it a more compelling transportation fuel, so there are opportunities there, Lilly said.

He's also invested more confidently in exploration and production companies:

Comstock Resources Inc. (CRK, $38.27), Frisco, Texas, has a lot of acreage in Louisiana's Haynesville Shale natural gas field, which some think could hold some of the country's biggest natural gas deposits. Comstock and other companies have already had prolific drilling results, he said. Comstock shares have traded in a 52-week range of $24.34 to $52.70.

Brigham Exploration Co. (BEXP, $8.46), Austin, Texas, has become a big player in North Dakota's oil-rich Bakken Shale.

Ben M. "Bud" Brigham is a Texas oil man who acquired several hundred thousand acres of Bakken Shale land. His company was going gangbusters until the price of oil collapsed last year. Brigham had no capital to keep drilling and its share price bottomed out at $1.04 in March.

When the company raised more cash through the sale of stock in May, Cortina began buying, Lilly said. The stock has risen considerably, touching $10.61 last month, but Lilly says it likely has more room to grow, he said.

"A lot of people still view it as a volatile Gulf Coast play," Lilly said. "When you really dig into the numbers, and the potential they have and their ability to exploit it, we don't think it's overvalued at all."

Brigham Exploration shares could go as high as $15 in the next six to 12 months, he said.

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