The recent selling in the markets has pushed some energy stocks down to bargain levels. Still, unless the global recovery comes to a screeching halt this year, we should see an increase in demand for oil and gas.

While we hear talk of alternative fuel sources, the simple truth is that those fuel sources will take time to hit the mainstream. For the time being, oil and gas will remain the primary fuel to provide energy in the United States and most of the developed world.

Thus, long-term investors should consider staking out a position in these value energy stocks before their recovery potential is fully recognized.

Energy Stocks to Buy: Swift Energy (SFY)

Swift Energy (SFY) is one of my favorite energy stocks right now — shares are simply too cheap at current levels. SFY stock is down 13% to start the year after losing 10% in 2013 as investors are not satisfied with the company’s transition from natural gas to oil and nat gas liquids production.

Swift Energy has extensive holdings in the Eagle Ford shale region, and the price of SFY doesn’t reflect the current value (much less the potential production) of these holdings. Swift Energy has been selling lower growth assets and using the cash to drill new wells and increase production from existing wells in the region.

SFY trades at just 50% of book value and is one of the most undervalued stocks in the energy sector right now.

Energy Stocks to Buy: PennWest Petroleum (PWE)

PennWest Petroleum (PWE), like SFY, is down 13% after a lackluster 2013. PennWest has been hit hard by low natural gas prices, and in all honesty, management was not executing very well. The solution to that is to replace management, which is what PennWest has done.

The new chairman and CEO are focusing on selling off noncore assets and by the end of 2014 expect to have shed $2 billion in assets. The cash will be used to shore up the balance sheet and focus on operations at its three best locations.

PWE stock is trading at about 40% of book value and management is committed to maintaining the dividend for now. Shares currently yield 7.2% at 14 cents quarterly, so as of right now, you will get handsomely paid while you wait for the turnaround to gain traction. However, it’s worth pointing out that the dividend was slashed from 27 cents midway through last year, so the dividend isn’t necessarily as secure as other payout champions.

Energy Stocks to Buy: Rowan Companies (RDC)

Rowan Companies (RDC) has seen its shares fall a little more than 11% so far in 2014 and the shares are back down to around 80% of book value. Investors are bearish on the potential for the offshore oil and gas contract drilling services provider, but Rowan has newer vessels than most of its competitors and is in a strong position in a weak market.

I have done very well over the years buying Rowan at 80% or so of book value and expect a similar profitable result this time

The larger energy stocks like Exxon Mobil (XOM) and Chevron (CVX) have also dropped by double digits so far this year, but it’s hard to argue that they cheap at these levels. Focusing on the smaller production and oil services companies should prove far more profitable during the current weak market conditions.

As of this writing, Tim Melvin was long SFY, PWE and RDC.