By Jonathan Chen, Benzinga Staff Writer

Exxon Mobil (XOM) announced a decent third quarter Thursday, reporting revenue of more than $125 billion. It is the world's largest oil and gas company, but that doesn't mean it's the best.

That distinction might go to Occidental Petroleum (OXY), which is highly levered to the price of oil, and blew out estimates Thursday in its quarterly earnings report.

Occidental reported third quarter profit of $2.17 per share on $6.01 billion in revenue. Wall Street analysts were expecting of $1.95 per share on $5.7 billion in revenue. Shares soared in response, helped by a deal out of Europe, and closed up 9.7% to $95.66.

Occidental competes with the likes of Exxon, Conoco Phillips (COP) and Chevron (CVX), yet Occidental offers one thing these oil behemoths do not: Growth. And lots of it.

Last year, Occidental reported profit of $1.47 per share on $4.90 billion in revenue. On a year-over-year basis, the company grew earnings 46% and revenue 22.6%. For an exploration and production company valued at over $70 billion, that is tremendous growth. You are not going to see that kind of revenue and earnings growth from the oil majors. Occidental also trades along with the price of oil.

Oil looks like it's going to $100 per barrel, especially after Europe has started to really figure out some concrete plans to save the European Union. West Texas Intermediate oil is over $90 per barrel, and now that China has started to signal actions to help the economy, we could see $100 per barrel very soon.

That price is a psychological number that gets media attention, although it does not slow consumption. It does get people talking, however.

Occidental trades at a 10 times 2012 earnings estimates, and sports a 2.2% dividend yield. For a company with double-digit growth on revenue and profit, that does seem to be a bit on the cheap side.

Wednesday, Goldman Sachs suggested buying straddles on Occidental going into earnings. The firm's analyst, Arjun Murti, said that he saw 17% upside to his six-month price target, and that buying straddles on the name would be a good way to gain exposure to oil shale in California.

Occidental is growing extremely fast, and is highly levered to the price of oil, which looks to be in an uptrend. The company is not a household name, but with results like this quarter after quarter, it will definitely make people stand up and notice.

ACTION ITEMS:

Bullish:
Traders who believe that oil will go higher might want to consider the following trades:

• Occidental is cheap on a valuation basis, if you believe the estimated earnings for 2012. Traders may want to consider positions in Occidental.

• This could also benefit names like Hess (HES) and Apache (APA).

Bearish:
Traders who believe that Europe's plan will not really solve anything and take risk assets sharply lower may consider alternate positions:

• If oil goes lower, traders may want to look at going long Exxon or Chevron, which are less levered to oil, and shorting Occidental in a pairs trade. This provides income and some stability to a portfolio. 
  
  

Neither Benzinga nor its staff offer investment advice, nor do they recommend that you buy, sell, or hold any security.

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