The last year has been particularly tough for energy stocks because of the protracted weakness of oil prices. There are signs, however, that oil may have finally found its bottom as it’s up by over 60% from its February 2016 lows.

While fundamentals indicate there is more short-term pain ahead, there are signs that oil will rally quite strongly over the long term. This means that while investors should still exercise caution when investing in the energy patch, the time has come for them to take advantage of depressed prices and start investing in high-quality upstream oil producers.

One of the best opportunities, which is attractively priced, is light oil producer Whitecap Resources Inc. (TSX:WCP). It possesses a number of key strengths that will allow it come through the oil rout in a stronger position.

Now what?

Firstly, Whitecap has a low level of debt, which came to $879 million, or a mere 1.7 times operating cash flow, by the end of 2015. In fact, Whitecap’s debt in proportion to its cash flow is quite manageable and significantly reduces the company’s vulnerability to any further downturns in crude.

Peers such as Penn West Petroleum Ltd. (TSX:PWT)(NYSE:PWE) and Baytex Energy Corp. (TSX:BTE)(NYSE:BTE) remain extremely vulnerable to weak oil prices because of their mountains of debt.

Penn West is battling to repay debt totaling a whopping $1.8 billion, which amounts to a very worrying 10 times 2015 operating cash flow. This leaves it exceptionally vulnerable to bankruptcy, particularly when its financial covenants revert to their original levels later this year.

Meanwhile, Baytex’s position is not as risky as Penn West’s, but its debt totaling $1.9 million, or more than three times its operating cash flow, also leaves it vulnerable to weak prices.

Secondly, Whitecap has a high-quality, long-life asset base with oil reserves totaling 279 million barrels and a reserve life of almost 19 years. More importantly, 77% of these reserves are composed of light oil, which is advantageous because Canadian light crude trades at a 9% discount to West Texas Intermediate compared to the 31% discount for heavy crude.

Thirdly, Whitecap has some of the lowest cash costs in Canada, which were $14.54 per barrel for 2015, well below Penn West’s US$21.59 and Baytex’s US$17.14 per barrel.

This means that its existing production can remain cash flow positive at prices that other companies can’t, thereby ensuring its survival should oil prices remain low. It also emphasizes the higher operating margins that Whitecap can generate as prices rise, thereby giving its bottom line a healthy bump, making it a great levered play on the price of crude.

Finally, there is Whitecap’s ability to continue funding its exploration and development program, despite the sharp collapse of oil prices.

The continuation of this program saw 2015 production grow by 26% year over year, while its reserves shot up by a healthy 27%. This strong growth will continue as Whitecap has earmarked $148 million to be invested in its drilling and development program for 2016 that will see 71 wells drilled over the course of the year.

As a result of this program, Whitecap is forecasting that 2016 oil and natural gas liquids production will grow by 28% year over year, leaving it well positioned to take advantage of higher prices.

So what?

Whitecap is one of the best options for playing the long-awaited rebound in oil. Not only does it have a solid balance sheet and low operating costs that will allow it to survive the harsh operating environment, but it will emerge from that environment as a stronger company with increased production and reserves, leaving it well positioned to cash in on higher oil prices.

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Let’s not beat around the bush – energy companies performed miserably in 2015. Yet, even though the carnage was widespread, not all energy-related businesses were equally affected.

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Fool contributor Matt Smith has no position in any stocks mentioned.