Update
By Nicholas Varchaver

(FORTUNE Magazine) – What we said

In "Oil's New World Order" (Feb. 23, 2004), we wondered if it was too late to buy oil stocks. Crude prices were riding high, at $30 a barrel, and experts were predicting a major drop. Plus, the sector had enjoyed a 20% end-of-year rally. We concluded, however, that soaring demand and anemic production growth meant crude prices weren't likely to crash. We recommended four oil-company stocks whose production growth and balance sheets seemed promising.

What happened

Oil prices haven't fallen yet. Now hovering near $50, they're up more than 60% since our article. Oil stocks, needless to say, have benefited. Our picks have returned 28.6% on average since we recommended them, exceeding the oil sector's average 24.3% return during the period and obliterating the S&P 500, which has fallen 2.4%. Devon Energy (DVN, $71), the largest U.S.-based "independent" oil and gas producer, has soared by 31.5% despite seeing its Gulf of Mexico production hampered by hurricanes. Shares of Patina Oil & Gas (POG, $30) rose a split-adjusted 36.3% on a 46% revenue increase in the first half of 2004. Similar growth for XTO (XTO, $32) fueled a 23.0% increase in stock price. Finally, BP (BP, $58) earned a cool $4 billion in just the past quarter; its stock has risen 23.4%. -- Nicholas Varchaver