Source: Tom Armistead of The Energy Report (10/24/13)
James C. West, lead oil services and drilling analyst at Barclays:
The outlook for North America in 2014 has improved. We're getting some tailwinds from commodity prices, of course, but the oil companies that previously were gas companies have now arranged their drilling programs for 2014–2016 and are relaying that visibility to oil service companies that have been operating in North America in a fairly volatile environment for the last two years. Companies are much more optimistic on the outlook for 2014 in North America.
People should be increasing exposure to oilfield services given the constructive commodity prices and the constructive capex trends in the industry. We think we're in the early stages of a recovery in North America and in the early stages of good growth in the international markets.
The companies in the haves group are those that are currently able to service larger E&Ps and major oil companies. That means sophisticated supply chains, higher technology content, better equipment, better crews and typically multiple service lines rather than the mom and pops or the one-product-line companies that exist in North America.