With the dramatic fall in domestic natural gas prices during 2012, the results of the domestic oilfield services firms have been increasingly scrutinized. The performances have been mixed and the results have been very location specific as expected. The stocks have all headed lower.
The key is location, location, location. While the stock market has obsessed daily about the natural gas market in the US, just about every other market whether oil or natural gas around the world is very robust. This provides plenty of opportunity for the best positioned stocks that have been sold off with no regard to location.
Naturally results can be relatively predicted based on a companies exposure to domestic natural gas. The less the better. Hence Baker Hughes (BHI) preannounced bad results and Basic Energy Services (BAS) reported bad numbers. On the other hand, Haliburton (HAL) and Schlumberger (SLB) had generally good results though analysts had reduced expectations. Other major players like C&J Energy Services (CJES) and Weatherford International (WFT) have yet to report.
Read the full article at Seeking Alpha.
Disclosure: Long CJES and WFT. Please review the disclaimer page for more details.