Nigel Browne, Equity Research Analyst at Macquarie Capital, Interviews with The Wall Street Transcript: Large-Cap Diversified Service Companies to Benefit the Most from Accelerated E&P Spending

Wall Street Transcript

67 WALL STREET, New York - July 3, 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: Baker Hughes Inc. (BHI), Halliburton Company (HAL), Schlumberger Limited (SLB), Weatherford International Ltd. (WFT), Atwood Oceanics Inc. (ATW), Diamond Offshore Drilling Inc. (DO), Ensco International Inc. (ESV), Hercules Offshore, Inc. (HERO), Noble Corp. (NE), Rowan Companies Inc. (RDC), Transocean Ltd. (RIG), Helmerich & Payne Inc. (HP), Nabors Industries Ltd. (NBR), Patterson-UTI Energy Inc. (PTEN), Cameron International Corporat (CAM), Lufkin Industries Inc. (LUFK), National Oilwell Varco, Incorp (NOV), Oceaneering International, Inc (OII), Chesapeake Energy Corporation (CHK) 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: You're pretty comfortable with North America over the short to medium term?

Mr. Browne: North America is actually a very exciting story, one that the average investor may not be aware of. During the financial crisis, we started to see the development of unconventional fields and shale drilling. Chesapeake (CHK) was the most prolific independent E&P company targeting gas. If you look at the unconventional rig count since the financial crisis in 2008-2009, it has doubled since then.

Originally, E&P companies started out looking for natural gas, and were so successful that natural gas prices decreased from north of U.S.$12/Mcf to as low as below $3 in 2012. As gas prices came down, E&P companies shifted their attention toward using that same suite of technology and technique to developing unconventional oil reserves. As a result, a large proportion of capital and resources are being targeted toward unconventional drilling in prolific plays such as the Eagle Ford and Bakken.

To illustrate, around the time of the financial crisis in late 2008, only 20% of rigs were targeting oil. Today that proportion has grown to over 75% drilling for oil. One of the names I really like that's levered to the whole shift towards unconventional drilling is Helmerich & Payne. They have been a very prolific provider of drilling rigs, and while drilling rigs have been around for well over 100 years, in the past 10 years or so they came out with an unconventional-optimized offering, their FlexRigs. Patterson and Nabors followed suit and came out with their APEX Rigs and Pace Rigs respectively, which have some of the same features.

The point is, because they understand how to drill unconventional basins, they are...

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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