With oil topping $135 a barrel and signs clearly flashing that it’s headed even higher than this record level, a hot debate on Wall Street centers on how to make money in energy stocks, many of which have ballooned 25% to 30% in recent months — and 50% to 100% over the past 12 months.

For an energy stock candidate, the word from the East and West coasts is that attention should be turned to trading symbol E on the New York Stock Exchange, a company that, while relatively unknown, is performing “like the Italian stallion, Rocky Balboa,” a Los Angeles-based money manager, Leonard Mohr, says.

The company is Eni S.p.A., an Italian energy conglomerate that trades as an American Depository Receipt. The ADR is percolating, having sprinted to record highs both Tuesday and Wednesday, a two-day period in which the Dow took a dive of more than 400 points. It’s trading at $84.14, up sharply from its 52-week low of $59.72 and its 2007 close of $72.43.

If you’re game for an energy name that could provide a projected return of roughly 23% to 47% over the next 12 to 18 months, Eni fits the bill, the bulls say. The stock also offers a juicy 4.53% dividend that has grown at an average of 17% a year over the past eight years.

Eni, which is 30% owned by the Italian government, generated 2007 sales of $120.1 billion. Its interests include oil and gas exploration and production, power generation, natural gas operations, and oil refining and marketing.

Some pros contend that the dollar, after a recent bit of vigor, will soon head south again, reflecting a sagging American economy, giant deficits, rising inflation, significant credit worries, and falling interest rates. Other pros take the broad view that the price of oil, a shrinking worldwide commodity, should head even higher once global economic growth begins to display renewed sizzle.

One bullish New York newsletter, the Complete Investor, sees Eni capitalizing on both trends. Not only that; its managing editor, Genia Turanova, who recommended the stock a few months ago at $65, is projecting a rise to $105.

Mr. Mohr, a principal of MCR Associates who is a close tracker of energy stocks, sees an even rosier showing. Over the next 12 to 18 months, he says, “Eni is a $125 stock because it’s undervalued and is in the right place at the right time.” As for worries about a slowing European economy, Mr. Mohr views such concerns as “a buying opportunity.”

Ms. Turanova notes that if the dollar resumes its slide against the euro, it will enhance Eni’s appeal. Longer term, she points out, a stronger euro would provide an additional benefit in the form of a higher dividend payout when translated into dollars.

What if currency trends turn unfavorable? Ms. Turanova says Eni would still benefit from its strong financial position, its profit-generating ability, a high free cash flow yield, and local currency dividend growth.

She rates Eni’s shares as undervalued, insisting that the stock in no way reflects the current oil price. Moreover, she points out, it trades at a discount to other oils, the chief reason being Eni’s large interest in the giant Kashagan oil field in Kazakhstan.

Although this oil field is one of the largest oil discoveries of the past decade, holding an estimated nine billion to 16 billion barrels, its development has suffered from delays, excessive spending, and environmental difficulties that have led to past suspensions. There’s also the threat that the Kazakhstan government might seek a bigger take from the field or even nationalize it. Under the worst-case scenario, Ms. Turanova says, nationalization of the field already is being discounted in the current stock price.

Further, she notes, Kashagan isn’t the only new area in which Eni is aggressively pursuing to secure reserves in the world’s leading hydrocarbon-producing countries. In January, for example, it met with top Tunisian officials to discuss investing as much as $400 million over the next four years toward the development of two oil and gas fields in the country. Altogether, Eni operates in six continents and has interests in such countries as Russia — via a $5.83 billion acquisition of the assets of Yukos Oil Co., that nation’s biggest oil player — Algeria, America, and Saudi Arabia.

In short, Ms. Turanova says, while it may seem risky to own Eni, the risks are considerably less than for comparable companies domiciled in emerging countries. She also believes that the risk-reward ratio is considerably more favorable, arguing that the dividend and its 17% growth rate will provide good support for the stock.

The bottom line from our Eni bulls: Think energy, and when you do, don’t forget Italy’s Rocky Balboa.

dandordan@aol.com