E&Ps Cut Costs Through Increased Efficiencies: John Keller, Vice President in Equity Research at Stephens Inc., Interviews with The Wall Street Transcript

Wall Street Transcript

67 WALL STREET, New York - July 2, 2013 - The Wall Street Transcript has just published its Oil & Gas Review 2013 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, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Increasing Demand for Midstream Assets - U.S. Energy Infrastructure Build Out - Emerging Shale Plays - Oil and Gas Transportation Infrastructure Demand - Master Limited Partnerships Distribution Growth - Outlook for Natural Gas Liquids - Low Treasury Yields and MLP Dividends

Companies include: Schlumberger Limited (SLB), Halliburton Company (HAL), Basic Energy Services, Inc. (BAS), McDermott International Inc. (MDR), Helix Energy Solutions Group, (HLX), Oceaneering International, Inc (OII), Hornbeck Offshore Services, In (HOS), Helmerich & Payne Inc. (HP), Patterson-UTI Energy Inc. (PTEN), Atwood Oceanics Inc. (ATW), Diamond Offshore Drilling Inc. (DO), Ensco International Inc. (ESV), Transocean Ltd. (RIG), Exxon Mobil Corp. (XOM), Petroleo Brasileiro (PBR), Chevron Corp. (CVX), Total SA (TOT), Superior Energy Services Inc. (SPN), Hercules Offshore, Inc. (HERO) and many more.

In the following excerpt from the Oil & Gas Review 2013 Report, an expert analyst discusses the outlook for the sector for investors:

TWST: Where are you pointing investors now? What are some of your favorite stories at the moment?

Mr. Keller: One of the names that I think is very interesting right now, and it doesn't fit very squarely with the North American theme, is Pacific Drilling (PACD). It's an offshore drilling company that is a pure play on ultradeepwater. They have four ultradeepwater drill ships that they are operating today: two with Chevron (CVX), one with Total (TOT) and one with Petrobras. PACD is a very young company with a blue-chip customer base. They've got four more rigs that are scheduled to be delivered over the next two years. When all is said and done, you've got a company that's growing very appreciably over the next several years.

It's really the purest play on the ultradeepwater, with the newest fleet in the industry. As I said earlier, there is a global proliferation of deepwater, and I think the companies with new assets are going to be very well-positioned, for efficiency and safety reasons. There are few small-cap ways to gain exposure to the ultradeepwater sector, so Pacific is a good company that fits a niche in the marketplace and in investors' portfolios.

We also like McDermott International, an offshore construction company. They are involved in building and installing platforms and subsea infrastructure to support offshore development. You've seen a couple of good years of drilling activity on a global basis, and the construction cycle tends to lag drilling 18 to 24 months as a general rule. As a result, we should be coming into a period in 2013 where McDermott is going to get a large number of awards. There should be very strong bidding flow and order activity.

Finally, on the North American land side, we like...

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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