New International Exploration Areas Provide Opportunities for Offshore Oil Service Companies

Wall Street Transcript

67 WALL STREET, New York - February 25, 2013 - The Wall Street Transcript has just published its Oil & Gas: Drilling Equipment and Services 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: Capital Expenditures and Consolidation Activity - Frontier Exploration and Development - Shale Drilling Capital Expenditures - Oil Price Expectations - Shale Drilling Dynamics - Shale, Offshore and Deepwater Drilling - Oil and Gas Price Divergence - Offshore Deepwater Oil Discoveries

Companies include: Atwood Oceanics Inc. (ATW), Diamond Offshore Drilling Inc. (DO), Ensco International Inc. (ESV), Hercules Offshore, Inc. (HERO), Rowan Companies Inc. (RDC), Hornbeck Offshore Services, In (HOS), Gulfmark Offshore Inc. (GLF), Superior Energy Services Inc. (SPN), Basic Energy Services, Inc. (BAS), Natural Gas Services Group Inc (NGS), Oil States International Inc. (OIS), Exxon Mobil Corp. (XOM), Petroleo Brasileiro (PBR), Schlumberger Limited (SLB), Halliburton Company (HAL) and many more.

In the following excerpt from the Oil & Gas: Drilling Equipment and Services 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 right now?

Mr. Beeby: Across the space, I like Atwood. That's been the top pick for some time. They've got that growth profile, the year-over-year continuation of earnings growth, and they're at a reasonably attractive value today.

Secondly, I like Hercules. Hercules focused on the U.S. Gulf and shallow water, a very unique market there with very tight supply/demand. They've been very aggressive in pushing prices, and I think there's some upside left on that one, so I think that's another good name that I like.

On the larger-cap end, I like Ensco. They've got a good mix of steady backlog and newbuild contracts coming out. I think where they can be different than the rest of the group is by improving their 2013 cash position. They started their new build program a couple of years in advance of a lot of drillers, so they've gotten most of their large cash flow outlays largely taken care of. They still are taking delivery of assets, but given their larger asset base, they have the ability to, I think, do a more meaningful return of cash to shareholders, which is something that a lot of people are looking for today.

Finally, we've liked Superior for some time. I think there's probably a good opportunity after the earnings call to buy that one for the longer term.

TWST: What sticks out about them?

Mr. Beeby: I think investors need some exposure to North American land. I don't believe it's a great market for 2013, but I think it will be headed in the right direction. The trajectory is going to be upward in the year, I believe. Superior has...

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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