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Doug Sheridan

 
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  • 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.
    Dec 16 04:32 PM | Likes Like |Link to Comment
  • 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.

    Doug
    Dec 2 05:21 PM | Likes Like |Link to Comment
  • 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.
    Dec 2 01:57 PM | Likes Like |Link to Comment
  • 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
    Dec 1 10:16 AM | 1 Like Like |Link to Comment
  • Oilfield Ratings Point the Way [View article]
    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.
    Sep 15 09:23 AM | Likes Like |Link to Comment
  • 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.
    Aug 1 01:08 PM | Likes Like |Link to Comment
  • Is Baker Hughes Losing Its Touch? [View article]
    Hi GoshSteve,

    Looking at Baker Hughes's ratings in EnergyPoint's surveys over the years, the company has actually performed quite well. It's only in recent years that its ratings have begun to show some strain. While I do not mean to suggest that a centralized management approach is superior to a decentralized approach (or visa versa), I can tell you that oilfield customers have shared with EnergyPoint that they have found BHI more difficult to work with across units than some of it competitors. As my article mentioned, customers want oilfield suppliers to be "learning" organizations; that is, organizations that constantly learn and push for improvements. And they want this not only within -- but across -- divisions.

    While I do wonder weather BHI's ability to win more integrated business (e.g., the PEMEX packages) might be improved if its were a little more centralized in its approach to its business, I should tell you that I am somewhat skeptical as to whether the full blown integrated project management (IPM) approach some in the industry are pursuing is in fact going to be the wave of the future. EnergyPoint just started collecting ratings for IPM as a category, and they do not suggest (at this point, anyway) that customers are particularly pleased with what they are receiving. My guess is that if BHI simply continues to focus on doing a better job of “bundling” its individual products and services, it should be able to effectively compete (in part on quality) with Schlumberger’s and Weatherford's "IPM" offerings.
    Mar 4 09:10 PM | Likes Like |Link to Comment
  • Customer Satisfaction Declined Significantly During Oilfield Up Cycle [View article]
    Noble Corp (NE) is the parent of Noble Drilling. "Noble Drilling" is how the company is known to many in the marketplace. Note that Noble Corp is not the same company as Noble Energy, whose symbol is NBL.
    Mar 3 11:21 AM | Likes Like |Link to Comment
  • The Four Best Drill Bit Suppliers [View article]
    Hi Turninrite,

    Given your handle, I suspect you are in the oil and gas industry. As author of the original article on drill bits, I wanted to respond to your comments.

    True, drill bits are just a portion of sales for each of the four major bit manufacturers. However, they are much-focused upon (and touted) pieces of equipment because of the direct impact they can have on the overall cost of a well. Most customers look at the "cost" of a drill bit as the base price of the bit plus the additional amount they save (or pay) in day-rate for the rig, crews, etc. as a result of the bit’s performance (or non-performance). For example, if a bit's price is 2X but saves 4X in rig and crew costs, that's a "superior" bit compared to one that costs 1X but does not save anything at all in terms of rig or crew costs.

    In addition, one of the points of the orginal article was that the new computer-aided design and simulation being utilized by today's bit suppliers does appear to be very well received by customers -- so much so, that we suspect it might represent a potential next wave of product and service design in certain areas of the oilfield. If some manufacturers want to sell bits that don't last as long as their competitors (so they can sell more "replacement" bits in the short term), they do so at their own risk. The U.S. auto makers applied that kind of myopic thinking in the 70's and 80's, and now they trail the Japanese in quality, earnings and market share. Bit manufacturers clearly need to design, manufacture and service the very best products they can; to do otherwise is to place themselves on a very, very slippery slope in the longer term.
    Feb 10 06:55 PM | Likes Like |Link to Comment
  • On the Grey Wolf-Basic Energy Merger: Bigger Isn't Always Better [View article]
    User 184091, thanks for your question. Since 2003, EnergyPoint has collected literally thousands of evaluations of oil and gas industry suppliers by their customers. In reviewing this information, it is clear to us that customers' satisfaction levels often fall (sometimes significantly) when the transaction is transformational in nature and / or the purchaser's customer satisfaction levels are lower than that of the company being purchased. Again, I've based my comments on specific, considerable and closely watched customer satisfaction research in the industry, not on generalizations. Go to energypointresearch.co... if you want to view summary reports related to our surveys.
    Apr 27 01:13 PM | Likes Like |Link to Comment
  • Size Alone Won't Be Enough for Transocean [View article]
    GSchwinn, go to energypointresearch.co.... On the "Surveys" page, click on the "Oilfield Notes" button at the bottom. Then click on the "May 2007" under Monthly Notes. This report provides an analysis of the relationship between customer satisfaction and stock price performance in the oilfield product and services sector going back to 2004 (when EnergyPoint first started conducting its surveys). Included in the analysis are companies that are the result of past mergers and or high levels of M&A activity (i.e., Patterson-UTI, Weatherford, National Oilwell Varco, etc.). And remember, the point of the original article was not that the merger between Transocean and GlobalSantaFe was automatically going to result in lower customer satisfaction; only that there exists an increased risk that customer satisfaction will suffer as a result of the distractions and possible overconfidence that can accompany mergers.
    Feb 28 03:02 PM | Likes Like |Link to Comment
  • Size Alone Won't Be Enough for Transocean [View article]
    Gschwinn, thanks for your comment. I agree that the ability of customers to entice new entrants into the market place does not happen overnight. However, the majority of value in a company lies in what it can do beyond the next few of years. For example, if a company's net cash flow is projected to grow 10% annually for 20 years, 85% of the PV of the resulting stream of cash flows is generated AFTER the third year. My point (and the point of the original article) was that merging companies can experience problems at the customer level that can at times cause customer satisfaction levels to fall, and thus potentially impact cash flows well into the future. I focus on customer satisfaction in my analyses because it is an oft-overlooked factor that can cause companies to underperform or overperform compared to market expectations (in this case, your and others' expectations for "huge profits").
    Feb 28 10:19 AM | Likes Like |Link to Comment
  • Size Alone Won't Be Enough for Transocean [View article]
    MMarkkk, thanks for your post. While offshore contractors do currently enjoy leverage with their customers as you describe, those that do not meet the expectations of customers (for whatever reasons) do not simply receive free passes in the market place because times are tight. The customers that employ these rigs are experts at making sure they have the options they need to execute their programs in the longer term. Should any vendor or class of vendors perform poorly or attempt to unduly take advantage of tight markets, customers eventually figure out how to entice capable new entrants into the market (via long term commitments, etc.) such that the supply and demand picture becomes more balanced. Furthermore, any vendor that does not perform for its customers will find that new competitors will be disproportionately attracted to its markets in an effort to capture its disgruntled customers and unenthused prospects. It's a cycle that has played itself out time and time again in this and other industries, and one that absolutely should be a consideration of thoughtful observers.
    Feb 27 11:44 AM | Likes Like |Link to Comment
  • Size Alone Won't Be Enough for Transocean [View article]
    In response to "Thinking ahead's" comment that "the customer service aspect in your survey is not important", I respectfully disagree. First of all, you confuse customer SATISFACTION in the oilfield (e.g., is the company and its employees good at their jobs, is the company's equipment well maintained, are their operations safe, etc.) with the kind of customer SERVICE you look for at J.C. Penny (e.g.. was the chashier friendly, did they help me find what I want, etc.).

    I can promise you that parties paying $500,000 per day for services and equipment very much consider the extent to which they and their companies are satisfied with the vendor they use!! Furthermore, poorly performing oilfield vendors in terms of customer satisfaction unquestionably suffer the consequences via negative word of mouth, lower levels of repeat customers, time and resources dealing with customer complaints, etc. Alternatively, vendors that satisfy customers enjoy positive word of mouth, increased customer loyalty, and more focused operations. It's very fundamental stuff that studies have confirmed over and over again.
    Feb 26 01:05 PM | Likes Like |Link to Comment
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