The roller coaster-like moves in the energy sector appear to be ending. Energy prices are no longer too low to spur the development of oil and gas fields. And they’re not so high that they will choke off demand for the world’s largest energy consumers. With an outlook for more stable energy prices in 2010, you can look for more positive results from the companies that provide all kinds of services and equipment to the global oil companies.

Many investors tend to focus on the industry titans such as Schlumberger (NYSE: SLB) and Halliburton (NYSE: HAL). They ought to pay closer attention to Weatherford International (NYSE: WFT), a mid-cap player that sports strong growth prospects thanks to recent contract wins.

If you simply look at the North American energy market, you’d see little reason to be optimistic. Natural gas prices remain weak and so many new gas fields have recently been discovered that another spike is very unlikely. Weatherford is feeling this hit as much as any player: Operating income in North America is likely to be just $250 million to $300 million in 2010, well below the $1.2 billion generated in 2008. Yet in the years to come, spending on natural gas fields should rebound as existing fields become depleted, supply shrinks and untapped wells get pulled into service. (Betting on natural gas when prices are weak can certainly pay off: Amy Calistri is up +650% this way.)

More importantly, Weatherford is also heavily exposed to the oil exploration market, which is in the early stages of a rebound — especially on the international stage. As a result, Weatherford is poised to see a sharp acceleration in profits. The company is just now ramping up in Iraq, Russia, Brazil, Saudi Arabia, Libya, China and elsewhere.

Earlier in the decade, Weatherford wouldn’t have been mentioned in the same breath as the biggest industry players — it had a limited set of products and services to offer customers. But an acquisition of Precision Drilling in 2005 and a purchase of BP’s (NYSE: BP) TNK division in 2009 has turned Weatherford into a full-service shop . Precision brought the company expertise in the area of oil and gas well drilling, while TNK had considerable exposure to the burgeoning Russian energy market. These deals have fueled an impressive string of new contract signings.

#-ad_banner-#Trouble is, those new deals are still in various stages of development, so the company’s recent fourth-quarter earnings report was a grab bag of slipped deadlines. Projects that should have showed substantial progress in the fourth quarter are just getting started. The company has sought to clear the decks by taking a series of one-time charges that pushed fourth-quarter operating results into the red.

To be sure, 2010 still represents a bit of a challenge: Weatherford is highly-exposed to the Mexican market, which is characterized by rapidly aging oil fields. Revenues from the region are falling, but the remaining contracts carry better profit margins that the contracts that have recently expired. So Mexican-derived revenues are likely to fall, but profits should fare better.

Here in the United States, it will likely be several more quarters before the imbalance between supply and demand for natural gas comes into balance. When that happens, drilling activity should begin a multi-year rebound and should help quarterly profits to move from roughly $0.10 a share in the current quarter, to the $0.30 to $0.40 range by the fourth quarter.

The stage could be set for a more robust 2011, when profit margins should rebound toward recent peaks. During the last five years, Weatherford’s EBIT (earnings before interest and taxes) averaged 18%. A lot of the company’s equipment sat idle in 2009, and it fell to just 9%. This is a very capital-intensive business, and margins can swing sharply if demand slumps even moderately. Yet EBIT margins should rise steadily through 2010 as all of that dormant equipment gets put back to work.

Why the brightening outlook? Weatherford acquired BP’s stake in TNK to gain greater access to the Russian energy market. Management concedes that it has been a challenge to integrate TNK into its operations, but expects to post strong results from that unit in 2011. In addition, the company has already secured more than $400 million in contracts in Iraq to help the country rebuild its energy infrastructure. Lastly, energy exploration efforts in a range of other countries are expected to rebound in coming quarters, unless we see another precipitous plunge in global energy prices.

Despite Weatherford’s promising outlook, most investors are squarely focused on the present, leaving the stock price stuck in the mid-teens. As investors start to look beyond the near-term noise, shares should again start to merit a P/E ratio closer to 20 , which is a typical valuation in the early stage of the energy exploration cycle for these companies. Weatherford looks set to earn $1.25 to $1.50 a share in 2011 , which means the shares trade for 10 to 13 times projected 2011 profits.

As the accompanying table shows, shares of Weatherford have the lowest projected P/E ratio in the group, even as earnings are expected to accelerate.

If Weatherford’s P/E rises back to 20, then shares could hit $25 to $30 as the industry truly enters an upturn.