2014 a Transitional Year for Oilfield Services and Equipment Companies: J.P. Morgan Analyst David Anderson Discusses Trends Within the Space and the Current Lower Oil Price Environment with The Wall Street Transcript

Wall Street Transcript

67 WALL STREET, New York - July 8, 2014 - The Wall Street Transcript has just published its Oil & Gas Review 2014 Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Oil & Gas Review 2014

Companies include: Halliburton Company (HAL), Schlumberger Limited (SLB), National Oilwell Varco, Incorp (NOV), Chevron Corp. (CVX), Exxon Mobil Corp. (XOM), Transocean Ltd. (RIG), Ensco International Inc. (ESV), Cameron International Corporat (CAM), General Electric Co. (GE), Total SA (TOT) and many more.

In the following excerpt from the Oil & Gas Review 2014 Report, an expert analyst discusses the outlook for the sector for investors:

TWST: What is your top piece of advice or key message for oilfield services and equipment investors in 2014?

Mr. Anderson: Own the high-quality-grade companies in my group, which I believe are trading at discount multiples right now. I think this is a hard group to just go in and buy outright. I don't think you can do that here. I think you need to be very selective at this stage.

I think certain parts of the space are cheaper than others, but right now I think the market's going to take a little while to digest some of the big questions that are out there, namely: What's the direction of long-term oil prices, how much could it impact the stocks? IOCs out there, the Totals (TOT) and the Shells (RDS-A), are cutting back capex in certain areas - does that impact this group? It's a little early to tell.

Offshore drillers look very attractive right now, but it's hard to see them get moving. I think what this is going to be a lot about in 2014 feels very transitional to me. Transitional from the standpoint that North America's going to convert to more development, and that's going to be a positive for some companies.

The other transition is people getting more and more comfortable with the lower oil price environment. I would expect to see more transactions, and some of them can be creative. I think you're going to see more MLPs out there, more spins out there.

I don't see necessarily a lot of straight up M&A, but I do think you're going to start seeing some of these companies getting creative. Particularly the smaller companies in North America who are going to be limping along and are not going to see pricing pick up, they're going to have to do something to stay competitive in this market. So I think 2014 is going to be a very interesting year...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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