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An Improved Environment for North American Frac Providers, Particularly the Big Three: Edward C. Muztafago of Societe Generale Discusses His Outlook on the Sector with The Wall Street Transcript

67 WALL STREET, New York - July 7, 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), Weatherford International Ltd. (WFT), FMC Technologies, Inc. (FTI), Cameron International Corporat (CAM), National Oilwell Varco, Incorp (NOV), Oceaneering International, Inc (OII), Ensco International Inc. (ESV), Noble Energy, Inc. (NBL), Rowan Companies Inc. (RDC) 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: In a May report, your view was that better days were ahead for U.S. frac, but that we wouldn't see a turn in pricing until 2014. What is your updated view, and is a pricing turn still likely for 2014?

Mr. Muztafago: I think the comment specifically was that we probably wouldn't see a turn until later in the first half of 2014. It certainly looks like it might be a little bit closer to late in the year. But the environment for the North American frac providers, particularly the big three, has certainly improved.

Halliburton, at this juncture, has no idle equipment. There's still some idle equipment amongst Baker and Schlumberger, but the 24/7 schedules on a lot of the equipment and utilization rates have come back a lot.

It certainly looks like the early indicators for budgeting in North America next year or capital spending by the E&P companies is probably going to be toward the high-single-digit range. So we think there's certainly a positive backdrop to tighten the frac market up enough to where maybe as you get later into 2014, maybe third quarter or fourth quarter. You may start to get some regional pricing improvement in basins that maybe a little bit tighter. 2015 is probably the more likely widespread, if you would call it, pricing improvement for frac.

TWST: What is the level of investor interest in oil and gas services right now, and generally speaking, do you think investors are correctly assessing the opportunities in the space?

Mr. Muztafago: I think what we saw this year, particularly in the early part of the year, is still some real hesitancy among lot of the long-only investors to step into the market. Obviously oil services and some of the other sectors within oil and gas have performed quite well this year, and I think as you got later into the year, you saw some of those long-only investors who feel 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.