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Posted on 9/11/12 at 6:44 pm to Interception
SLB, just like Halliburton and a couple of others gets a nice chunk of their revenue in North America in the last few years from well services. They were absolutely killing operators along with the other service companies pumping frac jobs while the gas drilling boom was in full swing. Mostly all of the gas rigs have gone to the Eagle Ford, Bakken, Mississippian Lime, and oil plays. Now with rig count hitting a plateau and maybe dropping some they have had to scale back their aggressive pricing. We will probably see some kind of rig decline which is likely to continue until gas prices can eclipse 4.50 - 5.00 as most of the operators in the oil plays have plenty of rigs currently and there are still a few holdouts in the Marcellus and elsewhere. Expect the oil services revenue to decline for SLB and others until this improves.
This post was edited on 9/11/12 at 7:26 pm
Posted on 9/11/12 at 11:59 pm to TheHiddenFlask
quote:
He seems to hate working for them. The process may have already started.
It's a very odd culture there. Not a lot of people like it if they haven't been brought up in it. I'm not sure exactly how they are so successful.
Posted on 9/12/12 at 1:47 am to TheHiddenFlask
quote:
He used to be a directional driller, but took several promotions and got into management.
I'm not looking to be able to compete with him about knowing about his job. Just rather be knowledgable about where the industry/company is going.
If he was in drilling, that would be a good place to start. The SLB division that handles that is called "D&M" - Drilling and Measurements. Also since he has a background in directional drilling, ask him about SLB's advances in horizontal well drilling and logging (taking measurements). They apparently lead the industry in tractor technology which push logging tools in horizontal wells.
I heard BP was planning to drill some of the the world's longest horizontal wells in Alaska and various service companies would have been involved including SLB. But BP recently suspended the project due to technical risks and prohibitive costs. Could turn out to be an interesting conversation as BP's shelving of this massive project will certainly mean possible future revenue losses for SLB.
This post was edited on 9/12/12 at 7:37 am
Posted on 9/12/12 at 8:51 am to iPadThai
Thanks for all the help guys.
Here's a specific question: Why is SLB trading at 18x and HAL is trading at 10x? Are the forward earnings looking that good/bad? The reason I never got into oilfield service is that they always seem to trade at a very lofty P/E. Why is that the norm for the industry?
If you had to buy HAL or SLB, which would you pick?
Here's a specific question: Why is SLB trading at 18x and HAL is trading at 10x? Are the forward earnings looking that good/bad? The reason I never got into oilfield service is that they always seem to trade at a very lofty P/E. Why is that the norm for the industry?
If you had to buy HAL or SLB, which would you pick?
Posted on 9/12/12 at 11:08 am to TheHiddenFlask
quote:
Why is SLB trading at 18x and HAL is trading at 10x? Are the forward earnings looking that good/bad?
Its more of a factor of HAL being undervalued, I'd definitely buy HAL over SLB. Its possible HAL is still having a macondo hangover.
Posted on 9/12/12 at 12:00 pm to barry
By comparison:
SLB 18x
NOV 15x
BHI 11x
HAL 10x
NOV is interesting here. Their automated drilling technology is going to have a huge impact on the industry. There is talk that some of the technology is so advanced the "on location" directional driller will be a thing of the past. SLB is also a player in the automated space.
I do agree that HAL is undervalued due to GOM deepwater activity.
SLB 18x
NOV 15x
BHI 11x
HAL 10x
NOV is interesting here. Their automated drilling technology is going to have a huge impact on the industry. There is talk that some of the technology is so advanced the "on location" directional driller will be a thing of the past. SLB is also a player in the automated space.
I do agree that HAL is undervalued due to GOM deepwater activity.
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