John Leonard, CFA
Special situations, micro-cap, contrarian, CFA

Forbes Energy Services Is An Attractive Oilfield Services Provider With Multiple Catalysts

Investment thesis

Forbes Energy Services (NASDAQ:FES) trades at a 5.4x EBITDA multiple, which does not reflect its strong competitive position in two of the fastest growing production areas.

Company overview

FES is an independent oilfield services contractor that provides a broad range of drilling and production related services from initial drilling through production and abandonment to oil and natural gas companies in Texas, Mississippi, and Pennsylvania. FES provides services to over 575 companies including Anadarko Petroleum, Chesapeake Energy, ConocoPhillips, Rosetta Resources and Shell Oil.

FES operates through two segments:

The well servicing segment operates a fleet of 162 rigs, five coiled tubing spreads and nine tubing testing units. These assets provide well maintenance, well workovers, completion and swabbing...

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