For Immediate Release
Chicago, IL – October 27, 2010 – Today, Zacks Equity Research discusses the Oil & Gas Industry, including: Petroleo Brasileiro S.A., or Petrobras (PBR), Acergy S.A. (ACGY), Core Laboratories N.V. (CLB), Halliburton Co. (HAL) and Patterson-UTI Energy (PTEN).
A synopsis of today’s Industry Outlook is presented below. The full article can be read at http://www.zacks.com/stock/news/42174/Oil+%26amp%3B+Gas+Industry+Outlook+-+Oct.+2010.
Despite the ongoing weakness, the current oil price environment should benefit producers, particularly those international players having attractive growth opportunities in their home markets. One such standout name is Brazil’s Petroleo Brasileiro S.A., or Petrobras (PBR), which remains well-placed to benefit from stands to benefit from the country’s economic growth and massive pre-salt oil reserves. Additionally, we expect Petrobras’ expertise in deep-water operations, huge recent discoveries, and the growing domestic refined products market to fuel its medium-term earnings outlook.
Within the oilfield services group, we are positive on London-based Acergy S.A. (ACGY). With a healthy backlog, significant cash balances and no near-term refinancing requirements, Acergy should weather the challenging business environment better than many of its peers.
Our continued Outperform recommendation on Acergy ADRs also reflects the company’s high-quality client base, which mostly includes well-capitalized oil majors or national oil companies. We believe Acergy’s impending merger with Subsea 7 will create a stronger, more diverse seabed-to-surface engineering and construction player, enabling it to provide a broader array of services.
Another service provider we are a fan of is Core Laboratories N.V. (CLB). We like Core Labs’ leadership position in the reservoir optimization niche, along with its global footprint and deep portfolio of proprietary products and services. Furthermore, the company’s low asset intensive operations and limited capex needs allow it to generate substantial free cash flows.
Halliburton Co. (HAL), the world’s second-largest oil services firm, is also a top pick. We like Halliburton’s leading position in the global oilfield services market, its broad and technologically-complex product and service offerings, and its robust financial profile. The company’s recent results have been driven by increased activity in the unconventional oil and gas shale plays in North America, seasonal recovery of markets in the eastern hemisphere and improved activity in Latin America.
Among the onshore contract drillers, we are positive on Patterson-UTI Energy (PTEN). The Texas-based company, which had heavy spot market exposure, was hit badly by the financial crisis with operators tending to release land rigs to preserve cash. However, Patterson-UTI has recovered almost all its lost market share and its long-term outlook seems compelling on the back of recent acquisition of certain assets of onshore well service rig provider Key Energy Services.
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ACERGY SA (ACGY): Free Stock Analysis Report
CORE LABS NV (CLB): Free Stock Analysis Report
HALLIBURTON CO (HAL): Free Stock Analysis Report
PETROBRAS-ADR C (PBR): Free Stock Analysis Report
PATTERSON-UTI (PTEN): Free Stock Analysis Report
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