I have the deepest respect for James Chanos. He is the famous short-seller that grasped the cooked books of Enron before most Wall Street brokers and profited handsomely from it. He has seen many similar shenanigans and has been proven right many times.

Chanos recently said of big oil: “If you look at their cash-flow statements relative to their income statements, you will see companies that haven’t replaced reserves in years, and haven’t seen any increase in revenues in years. They’re borrowing their dividend. They’re in effect liquidating.”

Note Chanos is not bearish on oil, he is bearish on oil companies that were shrinking due to inability to replace their production.

What he said is actually bullish for oil prices. If there is no easy oil to be found to replace current production and there is rising demand, prices have to rise over the long-term. There is no way to find out which major U.S. oil companies Chanos is shorting, but there is a way to focus on oil companies with good reserve replacement ratios; it’s only prudent for long-term investors bullish on oil. The stocks below are good examples of how you can invest in emerging markets’ growth with stocks having potential in the S&P 500; all without being captive to the failed idea of indexing with the wrong index.

We know that Warren Buffet thinks that oil prices will rise over the long-term. This is why he holds a major $1.8 billion stake in Conoco Phillips (NYSE: COP). Berkshire also owns some ExxonMobil (NYSE: XOM), but it is an almost negligible $28 million position. Having followed Conoco for a while, I believe that Buffett bought the stock due to its excellent reserve replacement history and its higher leverage to the price of oil. When oil prices are strong, Conoco tends to outperform the Energy SPDR (NYSE: XLE), though it tends to underperform in a weak oil price environment. Crude oil has softened here with the weak U.S. economic data and it may correct some more, but that certainly will be an opportunity to buy a solid oil stock with a bright future.

In 2009, Conoco produced reserve replacement of 141%, which is roughly in line with its five-year average of 145%. In simple terms, that means that over the last five years Conoco has added 1.45 barrels of oil equivalent for every barrel produced; Conoco is also a large natural gas producer. The 2009 numbers also include its 20% consolidated stake in Lukoil (OTC: LUKOY).

Since Conoco is in the process of selling half of its Lukoil stake, I wonder how that will reflect on their reserve replacement. There is a lot to like about Lukoil. The Russian oil giant owns 1.1% of global oil reserves and delivers 2.3% of global oil production. More importantly, it is the second-largest non-state oil company in the world that is publicly traded — measured by proven reserves of hydrocarbons (number one is Russian natural gas giant Gazprom). You can’t ignore the fact that Lukoil has a P/E of 5.5.

Conoco is reducing its dependence on the refining market, where margins are weak. I am willing to give its long-standing CEO Mulva the benefit of the doubt to see how he reshapes the company in the next two years after $10 billion in asset sales, a stock buyback, and a dividend hike. The stock trades at 7.2 times forward earnings and yields 4.2% after the company increased the dividend payout as a part of its restructuring.

Looking at other producers, Occidental Petroleum (NYSE: OXY) did even better than Conoco in 2009 — replacing 206% of its production. The fourth-largest U.S. oil company is also the most domestically-oriented of the other majors as two-thirds of its reserves are based in the U.S. I wonder how that will affect this well-run franchise due to the British Petroleum (NYSE: BP) Gulf disaster — the stock has been somewhat weak of late. A domestically-oriented oil producer is more exposed to changes in U.S. energy policy than the rest of the majors which are more globally diversified. The Obama administration is under political pressure to show results given the coming fall elections.

Occidental’s stock always looks the most expensive of the majors — it trades at 11 times forward earnings — as the company carries nearly zero net debt; it has cash of $1.9 billion and total debt of only $2.6 billion on a revenue base of $17.1 billion. The other reason for Occidental’s premium valuation is that it has superior operating margins of 35.4% over the past year. Exxon sports 10.2% operating margins for the same period, while Chevron (NYSE: CVX) delivers 11%; Conoco comes in at only 6.9% due the exposure to low-margin refining, which is being reduced. Clearly, there are valid reasons for Occidental’s premium valuation.

So, while I agree that oil companies that don’t replace their reserves are poor investments, these that I have profiled are actually looking strong.

26 Broken Stocks to Sell Now. There’s a long list of companies that have jumped off their lows but are still trading at dirt-cheap prices. But BEWARE: these bargain stocks aren’t just cheap, they’re broken. Get their names here or risk losing your shirt.