CALGARY - Analysts in the oilpatch are sounding increasingly harpy these days, constantly encouraging investors to calm down and buy, buy, buy. Another brokerage joined the chorus with a report titled "Buy Them Like It's 1999!"

But even as some companies were hyped as insanely cheap, pessimism remained on a few of Canada's most recognizable oil and gas outfits.

Mark Polak, an analyst at Scotia Capital, is a short-term fence-sitter, but a long-term bull. After picking up coverage of 13 oil and gas companies yesterday, he noted the trifecta of problems plaguing Alberta's oilpatch -- lagging energy demand, poor credit conditions, and high costs -- will continue to dog the sector in the near-term. But Mr. Polak likes what he sees for the future.

Unsustainably low stock prices, a return of global energy demand, a rosier credit world, and a shortage of supply as oil and gas companies cut spending all will contribute to boosting the fortunes of the oilpatch, Mr. Polak said.

He expects an average one-year return of 69% for the group of 13. If investors stay clear UTS Energy Corp., a company shrouded by problems but with considerable potential, the average return still clocks in at 52%.

At the top of Mr. Polak's buy list sit Suncor Energy Inc. and Nexen Inc., both of which earn Scotia's "sector outperform" designation. Even if one assumes an oil price of US$60 per barrel, Suncor is still trading at 20% below the value of its existing operations, Mr. Polak calculates.

Investors can win two ways with Nexen. It is in "excellent" financial shape, and given its diverse group of assets there are a number of ways it could make an accretive acquisition. But it could also be hunted because its stock is cheap, its assets are rich, and the international energy powerhouses have more cash than they know what to do with. Nexen's top bosses have said they don't want to sell, meaning bidders will have to pay a pretty penny to convince them it is worth it. Advantage: shareholders.

Canadian Natural Resources Ltd., which must be breathing a sigh of relief as it puts the finishing touches on its multi-billion Horizon oil sands project just as the credit crisis has put the kibosh on megaspending, also earned "sector outperform" stripes, as did Talisman Energy Inc. and the battered UTS.

Picking up 13 oil and gas companies during a time of severe global economic turmoil isn't going to result in a report full of roses. Canadian Oil Sands Trust, Husky Energy Inc., Imperial Oil Ltd. have been grouped in the "sector underperform" category; in other words, steer clear. It's not that Mr. Polak thinks they are bad companies, it's just that their stock prices are about where they should be.

At worst, he notes that Canadian Oil Sands is in a bind because its Syncrude partners are tied up in their own oil sands projects,

and that Imperial should be faulted for playing it a little too safe when it comes to "capital discipline." Many oil executives would do the backstroke in a tailings pond for this kind of criticism: "Although [Imperial] is the least likely to ever destroy value, we believe it is the most likely to miss opportunities for value creation, particularly given the size and quality of the company's resource base."

A handful of companies are worth hanging on to if you already own them, but don't risk buying or selling them, Mr. Polak said. Connacher Oil and Gas Ltd., EnCana Corp., Harvest Energy, OPTI Canada Inc., Petro-Canada, were all tagged as "sector perform."