While the potential for disruption in oil-producing nations will continue to raise concerns about tightening supplies, a number of factors could help moderate prices. In Iran, for example, an overthrow of the theocracy could lead to more Western involvement in oil production, which would likely boost production. Saudi Arabia, where the royal family has a tighter hold on the country and where wealth disparities aren't as pronounced as they are in Libya, would likely continue to pick up some of the production slack if the flow of oil from less politically stable countries decreases.

As the drama unfolds among oil-producing countries, Lees continues to implement an investment strategy that concentrates on a focused portfolio of 30 to 50 stocks out of a universe of 300 energy industry names. Among the characteristics he looks for are strong free cash flow and earnings growth. While the fund's average holding trades at a slightly higher price-earnings ratio than those companies in its Morningstar peer group, its estimated long-term growth rate is almost double the peer group average.

For the most part, Lees has implemented the strategy successfully since he took over the fund nearly three years ago. But in a recent report, Morningstar analyst Rob Wherry notes that Lees' attempt to minimize damage from the fund's presence in BP backfired following the Gulf of Mexico oil spill disaster, when the manager's ill-timed sale and subsequent repurchase of the stock cost nearly a percentage point of return in 2010. But he made up for the lost ground in the second half after rising commodity prices and better economic times led him to load up on oil service firms such as Cameron International and Baker Hughes. The fund swung from a 17.3% loss at the end of June to a 16.6% gain by the end of the year.

"Lees still has some proving to do before the fund gets a full-throated recommendation," says Wherry. "But this offering shows some promise."

Lees admits that like many of his peers, he was blindsided by the magnitude of the Gulf disaster. Before it happened, he says, BP managers had assured him that they were putting a renewed focus on safety issues and procedures.

But he also sees an upside to the event. "Now, the technology and regulations to help stop these kinds of blowouts are in place," he says. "When you're drilling for oil through 7,000 feet of water, you can't say there will never be a problem again. But the chances of something like that happening are much lower now."

The disaster also means opportunity for companies such as fund holding Cameron International, which has a 40% share in the market for devices used on oil rigs that prevent blowouts. Another holding, National Oilwell Varco, is also a major presence in blowout prevention. Both companies should benefit from a new rig building cycle as well as the need for new products to meet environmental safety standards.

At 39% of assets, oil and gas equipment and services represents the fund's largest industry component. Lees likes the group, which includes Cameron International and National Oilwell Varco as well as Schlumberger and Weatherford, because higher commodity prices provide incentive for companies to spend money on equipment and services to get new projects online.

Lees is somewhat less enthusiastic about oil and gas exploration companies, which account for 27% of fund assets, since they tend to be capital intensive, particularly in expansion cycles. But he does like prospects for fund holding Anadarko, which has initiated successful drilling projects in Ghana as well as emerging U.S. onshore drilling plays in West Texas, Colorado and Wyoming.

Lees also likes the outlook for metallurgical and thermal coal producers, such as fund holding Peabody, which he calls "the coal industry's well-run version of Exxon." Demand for coal has been rising since it's the largest electricity-generating fuel source. At the same time, supplies have been constrained by a number of things, including rising costs and environmental concerns in China, heavy rains and flooding in Australia's coal-producing region and a stringent U.S. regulatory environment that reins in production.