Last Thursday was a bonanza for any investor lucky enough to have owned Stone Energy, an oil and gas exploration company that received a $2 billion buyout offer from Energy Partners Limited. In response, Stone’s shares turned in the kind of performance every investor dreams about – a one day gain of 22.5%, or $9.19 a share.

One big winner that day was energy whiz Alan Gaines, who is believed to own between 75,000 and 100,000 shares. He made a one-day killing of more than $700,000.

Mr. Gaines, a former crack institutional energy analyst who is now CEO and chairman of Dune Energy, a small Houston based oil and gas exploration and development company, acknowledged he holds a sizable position in Stone but wouldn’t say how many shares. He did say, though, that his shares, currently at $50.35, were accumulated in November 2003 at an average purchase price of $35.63 a share. All told, he’s understood to hold a current profit in the stock of more than $1 million.

No, you can’t just chalk it up to sheer luck, as Mr. Gaines has done this a number of times before, having held positions in such companies as Unocal and Vintage Petroleum before their stocks ballooned on takeover bids. Another home run was Kerr-McGee, whose shares shot up on a company-announced leveraged restructuring stemming from takeover threats by corporate raider Carl Icahn.

As Mr. Gaines sees it, the ongoing buyout trend in the energy sector conveys a clear message: In brief, major companies have the cash and are willing to pay top dollar to fatten their reserves.

So, the obvious question: Who’s next? His three top picks, all of which he owns, are Marathon Oil ($76.06), Anadarko Petroleum ($50), and Pogo Producing ($44.81).

Given their growth characteristics, he also rates as ripe takeover targets three other energy stocks he owns, namely Arena Resources ($31.20), Carrizo Oil & Gas ($27.90), and Range Resources ($25.54). “These are very inexpensive stocks,” he says. “That’s why I own all three in size.”

Another obvious question: Where does oil (now a bit above $70 a barrel) go from here?

Over the next year, Mr. Gaines, a one-time advisor to Mr. Icahn on his hostile takeover attempts for such energy biggies as Texaco, Phillips Petroleum, and Marathon Oil, expects oil to trade in a range between $60 and $80 a barrel. What’s more, he figures there’s a 50-50 chance of sustainable triple-digit oil in two to three years. At the very least, he sees a three-year window of $60-$80 oil. “High-priced oil is here to stay; it’s the new pricing regime,” he says.

What about those who say crude is headed back to $40 a barrel, arguing that there’s too much oil around and a glut of natural gas?

“That’s baloney,” he responded. The ingredients are already in price for sustainable high-priced oil, he said. He cited such reasons as:

* Increasing global demand, especially from China and India.

* Declining domestic production.

* The constant threat of terrorism and supply disruptions. Mr. Gaines estimates oil’s terrorism premium at about $15 a barrel, a figure he believes will remain intact. “That’s the world in which we live,” he says.

* Weather-related disruptions from hurricanes. “We’re supposed to be in for an active hurricane season this year, but with fewer and less severe storms,” Mr. Gaines says.

* Uncertain supply from Venezuela, Iran, Nigeria, and Russia.

* Questionable incremental output from OPEC.

Although bullish on oil and gas, Mr. Gaines says he thinks investors should be wary of the oil services sector, notably the rig companies. He points out that whenever there is a shortage of rigs, which is currently the case, it has led to a substantial increase in capacity. That, in turn, is the forerunner of lower day rates. By the end of next year, he observes, land drillers expect to add 500 new drilling rigs, which is equivalent to a 30% increase in working rigs. Pointing in particular to such leading land drillers as Nabors Industries ($35.88), Patterson-UTI Energy ($29.36), and Parker Drilling ($7.51), Mr. Gaines says “they now offer as much downside as upside, and if I owned them, I’d be a seller into strength.”

dandordan@aol.com