Thu, Apr. 23, 5:49 PM
- At least a half-dozen major industrial companies - including GE, Caterpillar (NYSE:CAT) Siemens (OTCPK:SIEGY), Honeywell (NYSE:HON), Dover (NYSE:DOV), Danaher (NYSE:DHR) and Emerson Electric (NYSE:EMR) - are said to be weighing offers for oilfield services assets worth $5B-$10B that Halliburton (NYSE:HAL) is preparing to sell ahead of its pending merger with Baker Hughes (NYSE:BHI), Bloomberg reports.
- HAL reportedly will send offering materials to those companies, as well as P-E firms and rival oilfield services providers, in the coming weeks; first up likely will be the drill bits unit and another that uses data to track and steer the direction of drills.
- These companies could own an edge over oilfield services companies that analysts have pegged as logical bidders for HAL’s castoffs - such as National Oilwell Varco (NYSE:NOV) and Superior Energy Services (NYSE:SPN) - because HAL might not want to give any more market share to companies that already offer the same services, preferring to sell to new players entering the market.
Thu, Apr. 9, 5:48 PM
- Sell-rated Helmerich & Payne (NYSE:HP) has the greatest risk for negative revisions among its oilfield services peers, Citi analyst Scott Gruber writes, since earnings compression is happening faster at peers; 2016 estimates are above consensus for Patterson-UTI Energy (NASDAQ:PTEN), RPC (NYSE:RES) and Superior Energy (NYSE:SPN), partly reflecting improvement in pressure pumping margins given a lack of contract roll.
- Gruber also thinks consensus estimates are too optimistic, pricing in a full recovery in one year; the Street expects HP’s land business to generate $400M in sales in FY 2016, which Gruber estimates would require a spot dayrate of more than $30K/day or a rig count of ~270, which would be within 5% of the prior peak.
- HP currently trades at 1.7x 2016 consensus price to book value vs. 1.1x for PTEN, 1.1x for Precision Drilling (NYSE:PDS) and 0.9x for Nabors Industries (NYSE:NBR); Gruber says history suggests downside risk to 1x as HP's return on equity likely will fall to 3% in 2016.
Thu, Feb. 26, 6:38 PM
- Credit Suisse says the recent rally in oil prices and in oilfield services stocks (NYSEARCA:OIH) is a classic dead cat bounce, and that as soon as U.S. storage gets full - and it is close - crude prices will fall, bringing expectations and stocks down with it.
- The firm says its sector outlook is increasingly negative as companies report increased pricing pressure, a record drop in the activity barometer of the rig count, and offshore rigs and projects confronting headwinds that could take a couple of years to fix.
- Relevant stocks: SLB, HAL, BHI, CAM, HLX, SPN, NOV, FET, DRQ, FTI, OIS
Mon, Feb. 23, 9:55 AM
- Superior Energy Services (SPN -4.2%) opens sharply lower after Credit Suisse downgrades shares to Neutral from Outperform, cuts its price target to $23 from $27, and lowers its 2015 and 2016 EPS estimates to $0.58 and $0.54 from a respective $1.44 and $1.83.
- Noting that 66% of SPN's 2014 revenues came from onshore U.S., Credit Suisse expects near-term commodity price weakness and duration of the slowdown will only exacerbate capex cuts and activity.
- Longer-term, the firm believes SPN is a formidable oilfield services company with investment-grade credit, $1B in liquidity, focused international expansion and disciplined ambitions for both organic and acquired growth.
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Thu, Jan. 15, 6:45 AM
Fri, Jan. 9, 7:55 AM
- Oil and gas companies could cut E&P spending in North America by 30% or more this year if U.S. crude oil prices continue to trade at $50-$60/bbl, Barclays estimates on the basis of a survey of 225 oil and gas companies.
- The firm expects U.S. onshore rig count to fall by 500 rigs over the year to ~1,250 rigs by the end of 2015.
- Barclays says this is only the seventh time in the 30-year history of its survey that global spending is estimated to fall, adding that spending rose by more than 10% the following year after almost every decline.
- In the oilfield services group (NYSEARCA:OIH), the firm initiates Halliburton (NYSE:HAL), Baker Hughes (NYSE:BHI), National Oilwell Varco (NYSE:NOV) and FMC Tech (NYSE:FTI) at Overweight, and Forum Energy Tech (NYSE:FET) and Dril-Quip (NYSE:DRQ) at Underweight; Schlumberger (NYSE:SLB), Cameron (NYSE:CAM), Weatherford (NYSE:WFT) and Superior Energy (NYSE:SPN) are started at Equal Weight.
- ETFs: XLE, ERX, VDE, XOP, ERY, DIG, DUG, IYE, XES, IEO, IEZ, PXE, FENY, PXJ, RYE, FXN, DDG
Dec. 23, 2014, 6:19 PM
- Although the energy sector led today's stock advance, a raft of companies downgraded by Global Hunter mostly took it on the chin - none more so than Key Energy (NYSE:KEG), which plunged 15% after shares were cut to Reduce from Neutral with a $1.50 price target that was reduced from $2.50.
- Also downgraded to Reduce were HERO -6.1%, NBR -3.2%, DO +1.3%.
- Lowered to Neutral were HAL +0.5%, GEOS -8.9%, HP -2.9%, BAS -2.5%, PKD -2.5%, BHI +0.6%, BBEP -0.2%, MEP +0.1%.
- Downgraded to Accumulate: PES -3.5%, PTEN -1.1%, NGLS +2.9%.
- The firm upgraded five stocks - ATW, NOV, OII, RES and SPN - all of which gained in today's trading.
Dec. 18, 2014, 11:43 AM
- RBC upgrades Baker Hughes (BHI -1.2%) to Outperform from Sector Perform with a $72 price target, but the praise isn't earning the gains enjoyed by Key Energy (KEG +38.1%) and Superior Energy (SPN +4.5%) after the firm's similar upgrades.
- RBC likes BHI in its belief that sentiment will start to shift on North American land names as the oil price improves throughout 2015; BHI and Halliburton both generate ~50% of their operating income in North America, the firm notes.
- BHI continues to trade at a discount to the deal price of its merger with HAL, and should trade closer to the deal price throughout the year assuming U.S. government hurdles are met.
Dec. 18, 2014, 9:59 AM
- RBC recommends increasing weightings and exposure to oil service stocks (OIH +2.5%) heading into 2015, as it says oil prices will start to improve in H2 of next year and that oil service stocks typically discount this move by 6-9 months.
- Down cycles such as 2000-02 and 2008-09 suggest North American land drillers and service companies provide the best returns off business cycle lows, RBC says as it expects a similar dynamic this time.
- RBC upgrades Key Energy (KEG +24.6%) and Superior Energy (SPN +7.5%) to Outperform, and downgrades FMC Tech (FTI +1.8%), Franks (FI +4.9%), Oceaneering (OII +0.2%) and Oil States (OIS +2.3%) to Sector Perform; the firm also says since 1985 three of the top five performing stocks off lows have been Patterson-UTI (PTEN +6.6%), Precision Drilling (PDS +4%) and Nabors (NBR +7.2%).
Nov. 28, 2014, 10:35 AM
- Oil service companies mull OPEC's threat to the U.S. shale boom by its decision to hold production and the resulting tumble in oil prices.
- C&J Energy (CJES -17.6%), RPC, Inc. (RES -14.5%), GreenHunter Resources (GRH -9.5%), Seventy Seven Energy (SSE -16.5%), Pioneer Energy (PES -13%).
- Larger names: Halliburton (HAL -11.5%), Schlumberger (SLB -9.7%), Superior Energy (SPN -15%), Baker Hughes (BHI -9.1%).
Nov. 18, 2014, 6:48 PM
- Halliburton’s (NYSE:HAL) $34.6B buyout of Baker Hughes (NYSE:BHI) has caused HAL shares to plunge 12% since the deal was announced Monday, the worst two-day performance for an acquirer’s stock this year; on average, a company announcing a deal has seen its stock pop 3.1% on the news.
- But analysts say the deal may present game-changing opportunities for a few small and mid-cap oilfield services firms with enough cash on hand to buy a chunk of HAL's expected divestments without diluting their stock or damaging their credit rating.
- Tudor Pickering Holt's Jeff Tillery speculates that Forum Energy Technologies (NYSE:FET), National Oilwell Varco (NYSE:NOV) and GE would be interested in HAL's manufacturing businesses that may come up for bid, while Superior Energy Services (NYSE:SPN) and Frank's International (NYSE:FI) might want certain services-oriented businesses.
- Weatherford (NYSE:WFT) would seem like a logical buyer of some assets and could make it happen with a mix of cash and stock, but RBC's Kurt Hallead thinks HAL might not want to cooperate with a company that could essentially become what Baker Hughes was.
Nov. 14, 2014, 12:48 PM
- Oil services companies are mostly higher as Halliburton (HAL +1.7%) is indeed in talks to buy Baker Hughes (BHI +0.5%), a deal that would provide a jolt to oilfield services companies contending with falling oil prices: SLB +0.4%, OIS +1.2%, SPN +2.3%, CAM +0.2%, FTI -0.3%, NOV -0.6%.
- Sterne Agee analyst Stephen Gengaro calls a potential HAL-BHI combo a “HAL of a Frac-ing Deal," seeing several positives for HAL including strengthening its relatively weak position in artificial lift and production chemicals which are critical to enhancing HAL’s mature field strategy, enabling it to leverage its unparalleled U.S. pressure pumping logistics chain to enhance the efficiency of BHI’s operations, and providing the opportunity for significant cost savings which likely would total $600M-$750M or more.
- While antitrust concerns could force some divestitures, Gengaro does not believe it would prevent a deal from happening.
- Other potentially attractive M&A targets among oil services companies could include Dril-Quip (DRQ +0.7%), Frank’s International (FI +2.6%) and Oceaneering (OII -0.2%), Simmons & Co. says.
Oct. 29, 2014, 4:41 PM
Oct. 17, 2014, 10:17 AM
- Oil services (OIH +4%) stocks rip higher at the open following a strong earnings report from Schlumberger (SLB +7.4%) and as oil prices stabilize.
- Tumbling crude prices haven’t shaken the faith of at least two of the top providers of drilling and production services: SLB CEO Paal Kibsgaard describes the drop as “fear of short-term oversupply” and says the company is not changing a long-term view that its earnings will almost double from last year’s level by 2017, while Baker Hughes (BHI +4.7%) CEO Martin Craighead says his company's customers don't believe crude prices will stay low.
- HAL +5.5%, SPN +5.2%, WFT +5.1%, CAM +2.1%, NOV +2%, FTI +1.8%, DRQ +1.4%.
SPN vs. ETF Alternatives
Superior Energy Services Inc is a provider of specialized oilfield services and equipment. The Company operates four segments: Drilling Products and Services; Onshore Completion and Workover Services; Production Services; Subsea and Technical Solutions.
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