Opportunities Stack Up, As Fracs Back Up [View article]
Hi rjj1960 - thanks for your comment.
I do agree with your assessment that as backlogs develop and suppliers tend to rush to complete jobs, quality and performance can and do suffer. However, I can't get on board with your other points. Keep in mind that the survey measured "customer satisfaction", not just "customer service". Customer satisfaction can be a function of a number of factors, including the quality of the frac job, the pricing and contract terms offered, the pre- and post-job planning of the job, the expertise of the crews and supervisors, as well as service and professionalism. So, its a lot more than just customer service. Furthermore, with crude prices over $100, a poor frac job can result in real monetary losses for customers. As a result, most oilfield customers today are much less likely to let poor quality products and services, for which can pay considerable premiums in many cases, just slide past them. Instead, they find alternative suppliers that can and do provide them with consistently good performance, during both busy and slow times. In fact, numerous studies have shown that stock prices of companies with high customer satisfaction, including oilfield suppliers, well outperform those with low levels of customer satisfaction. Of course, while there are still some persons and suppliers that believe they have the right to shortchange customers when times get busy, their numbers (and prospects) are shrinking.
Investing In The Supplier Side Of Shale [View article]
I think that's a great analogy. To be sure, domestic oilfield services providers have benefitted as a group from the growth shale plays to date. However, just like in any business, those suppliers that are particularly good at helping their customers get the most from the shale assets will see their market shares increase over time. The good news is that unlike the Califonia gold rush, the shale play looks to be a legit long-term opportunity.
Research has shown that higher customer satisfaction levels correlate very well with stock price appreciation, including growth of top and bottom line. Companies with low levels of customer satisfaction have difficult times growing (e.g., Dell a few years ago) becuase they spend so much time replacing and/or dealing with complaints of dissatisfied customers. The point of the article was to provide readers with an understanding that Tetra appears to have reversed the negative impressions many customers had of the company. In short, happy lloyal customers are much more willing to spur the growth you mention than unhappy and fleeing customers.
Thanks very much for your comments. We'd love to have you participate in EnergyPoint's confidential surveys if you'd like to evaluate Basic and/or others. If so, contact us at info@epresearch.com, and we'll set up up in our program.
Nabors: Oilfield Jack-of-All-Trades, Master of None? [View article]
Thanks for sharing this information. I agree, it does look like the company has been busy on the technology development front, particularly in it's businesses that fall outside of its flagship contract drilling rigs and crews.
How Happy Are Oilfield Contractor Customers? [View article]
SBH, thanks for the comment. It's always a balance between looking at the most recent survey results versus the long-tmer trends. We tend to believe both are important. As a result, you will note that the first and third charts reflect data more recent data (since 2008), while the second chart looks at longer-term results since 2004. In terms of our process of data collection, our surveys actually do not ever "end"; we are constantly collecting data on oilfield suppliers. However, to answer your question, the last quarter for which we collected the data supporting this report was Q1 2010.
Oilfield Suppliers That Scored the Highest [View article]
As you said, NOV is primarily a products provider. Thus it is measured in EnergyPoint's surveys in terms of respondent's satisfaction with the "HSE features and performance" of its products. In this area, NOV's rating since 2005 has measured been pretty close to the middle of the pack.
The Top 15 Global Oilfield Services Providers [View article]
I find this list to be interesting. In looking at it more closely, it appears that the rank is based on market captialization as of the end of 2009. However, I'm not sure why some companies are included in the list and some are not. For example, smaller companies such as SBM Offshore, Oceaneering Int'l, Core Laboratories, Tidewater, Bourbon, Superior Energy, Trican Well Services and Carbo Ceramics are included while some other prominent oilfield suppliers with larger market caps such as Cameron Int'l, Diamond Offshore, ENSCO Int'l, FMC Technologies, GE Oil & Gas, Nabors Industries, National Oilwell Varco and Noble Drilling are not included in the list. Do you know what the criteria were for the development of the PFC rankings? It might be interesting to understand.
What Exxon / XTO Deal Could Mean for Oilfield Suppliers [View article]
jarco, thanks for your comment.
Actually, I think it might be difficult to make the case that a shift of reserve ownership from independent E&P companies to E&P majors would be good for NOV. In short, it's not clear that such a shift would result in incremental sales of NOV's products (i.e., sales levels over and above that which would be realized if the reserves remained in the hands of independents). For example, Helmerich & Payne is a favorite drilling contractor of many larger E&P companies, yet H&P manufactures its own proprietary rigs (called FlexRigs) rather than purchase its rigs from NOV (although H&P does utilize some NOV components on the FlexRig).
On Dec 16 02:30 PM jarco wrote:
> I agree but and would add one other company to the list; namely, > NationalOilVarco [NOV]. While supplying much of the std. rig equipment, > NOV also is involved in the consumable end as well.
6 Oil Industry Suppliers to Consider [View article]
Jon6k, yes we do have some ratings information on Carbo Ceramics (ticker: CRR). In general, the data suggests the company rates quite high in terms of customers satisfaction. Contact me at EnergyPoint's offices in Houston if you desire additional detail.
6 Oil Industry Suppliers to Consider [View article]
jarco, thanks for the question. For EnergyPoint's oilfield products survey, we do ask land and offshore drilling contractors to rate the suppliers of rig and related equipment they use when providing their services. In fact, we posted a report to Seeking Alpha examining NOV and other such providers a few months back. Here's the link to that article: seekingalpha.com/artic...
On Dec 02 12:26 PM jarco wrote:
> Do you have thoughts on suppliers to these installers/processors? > > > Pipe suppliers such as NOV, for example.
6 Oil Industry Suppliers to Consider [View article]
<IMG class=authors_reply src="static.seekingalpha.co..."> mbkelly75, glad you found the article to be of interest. And thanks for the nice comments. Doug Sheridan
Although activity in the Bakken could impact the ratings of certain suppliers that are active in that area, EnergyPoint's surveys are by design global in nature. As a result, the performance of an integrated supplier in any one basin will typically have a relatively limited impact on overall ratings. And the nature of that impact will be based on whether customers in that basin are more or less satisfied with a supplier than other customers of that same supplier in other basins. Suppliers that tend to rate better in our surveys in the area of horizonatal/directional drilling are Helmerich & Payne in drilling services (HP) and Smith (SII) International in bits. Baker Hughes (BHI) scores more toward the middle of the pack.
Energy Equipment Suppliers' Performance Is Subpar [View article]
been there, thanks for your comment.
Our view is exactly as you say: once rig counts and activity begin to fall, prices fall as suppliers seek to maintain their market shares. Unfortunately, people are many times treated as only variable costs by suppliers, and too many are let go at the first sign of the downturn -- sometimes never to return to that employer or even the industry. More focus on the long term (i.e., managing "through" the cycles rather simply managing "by" the cycles) would certainly help improve the level or service and quality that oilfield suppliers are able to provide the industry.
Opportunities Stack Up, As Fracs Back Up [View article]
I do agree with your assessment that as backlogs develop and suppliers tend to rush to complete jobs, quality and performance can and do suffer. However, I can't get on board with your other points. Keep in mind that the survey measured "customer satisfaction", not just "customer service". Customer satisfaction can be a function of a number of factors, including the quality of the frac job, the pricing and contract terms offered, the pre- and post-job planning of the job, the expertise of the crews and supervisors, as well as service and professionalism. So, its a lot more than just customer service. Furthermore, with crude prices over $100, a poor frac job can result in real monetary losses for customers. As a result, most oilfield customers today are much less likely to let poor quality products and services, for which can pay considerable premiums in many cases, just slide past them. Instead, they find alternative suppliers that can and do provide them with consistently good performance, during both busy and slow times. In fact, numerous studies have shown that stock prices of companies with high customer satisfaction, including oilfield suppliers, well outperform those with low levels of customer satisfaction. Of course, while there are still some persons and suppliers that believe they have the right to shortchange customers when times get busy, their numbers (and prospects) are shrinking.
Investing In The Supplier Side Of Shale [View article]
A Turning of the Tide at Tetra [View article]
And for the record: I don't smoke. :).
Acquisitions Impact Oilfield Supplier Standings [View article]
Basic Energy's Workman-Like Ways [View article]
Doug Sheridan
Nabors: Oilfield Jack-of-All-Trades, Master of None? [View article]
How Happy Are Oilfield Contractor Customers? [View article]
Oilfield Suppliers That Scored the Highest [View article]
The Top 15 Global Oilfield Services Providers [View article]
What Exxon / XTO Deal Could Mean for Oilfield Suppliers [View article]
Actually, I think it might be difficult to make the case that a shift of reserve ownership from independent E&P companies to E&P majors would be good for NOV. In short, it's not clear that such a shift would result in incremental sales of NOV's products (i.e., sales levels over and above that which would be realized if the reserves remained in the hands of independents). For example, Helmerich & Payne is a favorite drilling contractor of many larger E&P companies, yet H&P manufactures its own proprietary rigs (called FlexRigs) rather than purchase its rigs from NOV (although H&P does utilize some NOV components on the FlexRig).
On Dec 16 02:30 PM jarco wrote:
> I agree but and would add one other company to the list; namely,
> NationalOilVarco [NOV]. While supplying much of the std. rig equipment,
> NOV also is involved in the consumable end as well.
6 Oil Industry Suppliers to Consider [View article]
Doug
6 Oil Industry Suppliers to Consider [View article]
On Dec 02 12:26 PM jarco wrote:
> Do you have thoughts on suppliers to these installers/processors?
>
>
> Pipe suppliers such as NOV, for example.
6 Oil Industry Suppliers to Consider [View article]
Oilfield Ratings Point the Way [View article]
Energy Equipment Suppliers' Performance Is Subpar [View article]
Our view is exactly as you say: once rig counts and activity begin to fall, prices fall as suppliers seek to maintain their market shares. Unfortunately, people are many times treated as only variable costs by suppliers, and too many are let go at the first sign of the downturn -- sometimes never to return to that employer or even the industry. More focus on the long term (i.e., managing "through" the cycles rather simply managing "by" the cycles) would certainly help improve the level or service and quality that oilfield suppliers are able to provide the industry.