Maybe there are industry experts out there shaking their heads at my naiveté, but I just don't see why this market is so limited. Wouldn't an energy services company like Flotek (NYSE:FTK) or Key Energy (NYSE:KEG) benefit by offering a supply component that is in high demand and capacity constrained?
The Bottom Line While there have been rumblings about the environmental impact of fracking (and France has gone so far as to ban the procedure), the math remains the same - there is not nearly enough easy-to-reach oil and gas in North America anymore. Odds are, though, that Carbo Ceramic's valuation pretty much encapsulates what is attainable close to home.
The real key for CRR going forward is the overseas market. What is often overlooked in "Peak Oil" discussions is the huge dichotomy in drilling activity (and technology) between North America and most of the rest of the world. Who knows how much more oil and gas is attainable outside the U.S. and Canada if producers start sinking wells and using stimulation technologies at a rate on par with North America.
If this overseas opportunity is real, Carbo Ceramics could yet have room to run. For now, though, it is an expensive wait-and-see proposition.