Check out some numbers on one of the most widely owned energy stocks in the market and see what you think.

For starters, shares of this $37 billion oil and gas producer have been seemingly unstoppable, delivering annual returns of more than 16% for the past 10 years. During that time, the company also posted annual growth rates of 19% for revenue, cash flow, dividends and book value and 23% for earnings per share (EPS). Return on equity (ROE) stands at 17%, nearly twice the industry average of 9%, and the operating margin is just north of 46%, compared with the industry rate of 27%. The company churned out more than 730,000 barrels of oil equivalent (boe) per day in 2011, and analysts expect it to produce nearly 780,000 barrels per day in 2012.

Sounds like a real keeper, doesn’t it? All six of the analysts who cover the stock say it is.

But I think they’re all dead wrong.

I don’t think Houston, Texas-based Apache Corp. (NYSE: APA) is a good investment right now, and it may not be for years. An extended lull is much more likely in my opinion.

A big part of the problem: At this point, most of the company’s wells are mature — production volumes have peaked and are set to decline until they’re completely depleted.

Apache is in this position because its strategy has typically been to buy mature properties from larger oil firms and wring them dry, like the Beryl oil field in the North Sea, purchased from Exxon-Mobil Corp. (NYSE: XOM) on January 3 for $1.8 billion, or the oil and gas fields in Canada, Texas and Egypt acquired from BP plc (NYSE: BP) for $7 billion in July 2010.

Sure, this strategy could continue to pay off, because the mature properties are usually acquired for a discount, and Apache has the technology to extract oil and gas the previous owners couldn’t reach. They’re high-risk ventures, though, because the technology and production costs are much greater. Thus, a 25% fall in oil a prices to around $75 per barrel would quickly evaporate profits, analysts estimate. Considering how shaky the economy is and could be for a couple more years, this danger is still very real.

Management obviously knows new oil and gas discoveries are needed to fuel long-term growth because it’s expanding international operations, which account for a third of total revenue (about $16 billion annually). Apache has been focusing a lot on Argentina, for example, last year devoting about $350 million to building 53 new wells in the Noroeste, Cuyo, Neuquén and Austral basins. The company has also been ramping up operations in Egypt, allocating nearly $1.2 billion to exploration and production there in 2011.

Egypt operations are Apache’s largest internationally, and account for about 171,000  barrels of production a day, or around 23% of the daily total. The plan is to add another 100,000 barrels of production a day by 2015. In Argentina, by comparison, production is 48,500 barrels a day, but the goal is to double that output by 2015.

Risks to Consider: Although Apache is taking steps to ensure long-term growth, it could be years before newer projects live up to expectations — and there’s no guarantee they will. Meanwhile, the company must rely mainly on mature oil and gas wells, declining assets with risks of their own as described above. The bottom line is Apache could be in for a long period of underperformance before production and profits really kick into high gear again. 

Action to Take –> Apache has a long history of growth and profitability, and shareholders have been well-rewarded. But for the reasons I’ve given here, the company could be ripe for an extended intermission. Indeed, shareholders may be fortunate to get a return at the lower end of analyst estimates, which call for a share price in the $130 range by the end of 2016. This translates to only a 6% compounded annual return based on today’s share price of about $97. Throw in the meager 0.6% dividend yield, and the stock just doesn’t look very attractive.

Plenty of other energy companies are much more promising at this point. Petroleo Brasileiro (NYSE: PBR), for instance, has far better growth potential, in my opinion, though its dividend isn’t any better than Apache’s. If you want an energy stock that could offer good growth and a solid dividend, then consider Valero Energy Corp. (NYSE: VLO). The stock yields 2.6%, and analysts see it jumping to at least $40 a share by the end of 2016. From the current price of $23 a share, this would be good for nearly a 12% compound annual return. Total SA (NYSE: TOT) seems worthy of consideration, too, with its 5% yield and analyst estimates calling for compounded returns of at least 9% annually.

P.S. — If you really want to know the best plays in energy right now, then you can’t go wrong with Energy & Income, the latest newsletter from StreetAuthority’s Nathan Slaughter, which focuses on his absolute best picks for growth and income in the market. To find out more about his newsletter, including the names and ticker symbols of his best picks, go here…