Is there opportunity to be found in cheap-looking energy stocks?

Senex Energy Ltd (ASX:SXY) and Beach Energy Ltd (ASX:BPT) both dropped, although at least one Foolish writer thinks Santos Ltd (ASX:STO) looks like a bargain.

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Oil prices continue to create significant uncertainty for Australian investors.

Australia's oil producers also appear to be responding differently to fluctuating oil prices depending on where they sit in the food chain.

Junior producers Senex Energy Ltd (ASX: SXY) and Beach Energy Ltd (ASX: BPT) actually sank 3.4% and 1% respectively yesterday, movement that should illuminate just how great the degree of uncertainty is with regards to these companies' earning potential.

Embattled Santos Ltd (ASX: STO) improved 4.5% yesterday, as any move away from the company's break-even production point provides a lot of reassurance for investors. There is a lot of market talk speculating that Santos may have to raise capital to retain its credit rating – or to cover its increased interest costs if its rating is decreased.

The company dodged a bullet the other day when its rating kept unchanged for the time being, but it may be only temporary.

Oil Search, like Woodside Petroleum Limited (ASX: WPL) has remained quite stoic in the face of weaker markets, with investors apparently hanging on the fact that a production ramp-up and continued exploration in Papua New Guinea promises rising earnings in the future despite declining prices.

Speaking of Woodside, that company remained unchanged, up 0.16% with investors' optimism over the oil price apparently contrasting with concerns that Woodside's share price could come down hard once lower oil prices flow through to earnings. Some analysts have stated the company could be worth as little as $18 each, and could cut its dividend by 75%.

It's a difficult sector to be in, although much of the initial shock of low oil prices has sunk in to share values already.

However I suspect that – if low oil prices continue – there will be a steady, slow grind downwards later in 2015 as companies report earnings and investors see those ominous 'Net Profit After Tax down 50% (for example) on prior corresponding period' figures.

Motley Fool writer Tom Richardson is jumping in early to catch the turnaround though, with hopes his bet on Santos will leave him sitting pretty in 2016.

I wish Tom luck, but I'm going to wait a little longer to see if I can't pick up the jewel in the golden crown – Woodside Petroleum – for a song.

Motley Fool contributor Sean O'Neill owns shares in Senex Energy.

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