Energy Industry Intel & Commentary
Few sectors have ever fallen farther over an extended period than oilfield suppliers have since the current industry downturn began in June 2014. Relative to the broader market, the sector’s decline may be unprecedented.
Continue reading “Can Oilfield Suppliers Save Themselves?”
This post was updated on June 24, 2019.
It is said what CEOs most enjoy is a challenge with outsize reward. If so, Mark McCollum should be ecstatic. As the incoming CEO of Weatherford International, he is tasked with resurrecting one of the more perennially promising, yet frustratingly underachieving, companies in the oil patch.
McCollum’s predecessor, long-time CEO Bernard Duroc-Danner, built an organization with a global presence and broad portfolio. However, the company found itself adrift in recent years as a string of financial losses and shifting strategies undermined employee morale and depleted investor confidence. Continue reading “Fulfilling the Promise of Weatherford”
As the oil and gas sector stirs with a hopeful sense of purpose, several of its largest and most influential suppliers are pursuing distinctly different strategies. It’s not just about which products and services will propel the industry forward. To some extent, the balance of power between providers and customers is at stake.
On one end of the strategic spectrum sit Schlumberger and GE Oil & Gas. With the help of recent acquisitions, both companies hope to meld oilfield equipment and services into a new seamless network, one capable of generating and interpreting streams of data for use in improving performance across all phases of a well. If successful, the impact could be far-reaching. Continue reading “Integrated Oilfield Suppliers Plot Divergent Paths”
Weatherford International recently reported 1st Quarter 2013 earnings after adjustments that were generally in line with consensus estimates. The following day, the company’s stock price rose more than seven percent. Investors seemed relieved that no additional shoes dropped in the earnings release or conference call. The fact that such rise in stock price occurred on a report of no unexpected bad news says a lot about how Weatherford is currently viewed in the investor community.
Below are our thoughts on what we’ve read and heard from Weatherford recently, both positive and negative, as well as some updated data regarding the company’s customer satisfaction ratings and what they suggest for its new strategic tact: Continue reading “The Grapevine – Weatherford Int’l”
Part 1 of this article discussed background issues at play for the companies in GE Oil & Gas‘ purchase of Lufkin Industries, including the uncharacteristic decline in Lufkin’s customer satisfaction ratings in 2011 and early 2012. It also took a look at the strategic rationale behind the deal.
This second part focuses on what the GE-Lufkin combination prospectively means for customers, with particular attention paid to the perceived cultural fit between the two companies. Continue reading “Sizing Up GE + Lufkin Industries – Part 2”
Despite its relatively small size and narrow focus, Lufkin Industries‘ products are iconic within the petroleum industry. Glance at virtually any photo of a West Texas oilfield, and you’ll likely see at least one gracefully oscillating Lufkin pump jack. The oilfield’s a pretty practical place, but there’s always been something sublime about that particular image.
With its announcement earlier this week that it will purchase Lufkin Industries for $3.3 billion — a rich 38% premium over the previous trading-day’s closing price — GE Oil & Gas obviously sees something inspiring in the shot as well. The industrial giant clearly believes there are strong secular growth prospects in artificial lift applications. Continue reading “Sizing Up GE + Lufkin Industries – Part 1”
As a capable giant in the oilfield, Schlumberger’s tentacles of services, manpower and ingenuity stretch into almost every major facet of exploration and production. Yet, from the purview of overall customer satisfaction, the company can appear more like a straw in a haystack.
To be sure, Schlumberger’s customer satisfaction ratings remain quite strong in the area of formation and well evaluation, a demonstration of strength at its core. In fact, its acoustics-while-drilling and related wireline suite of products and services are considered by some to be must-haves these days. Its scores are also strong in drill bits, drilling fluids, well testing, rotary steerable systems, deep water applications and international markets. Continue reading “New Tests Challenge Schlumberger”
Transitions are hard, especially big ones. They’re even more challenging when they take a company from a well-plotted, successful path to an more uncertain one. Such is the story with Baker Hughes.
It’s been over three years since Baker Hughes embarked on its high-profile effort to transform from a relatively decentralized oilfield products and services provider to one determined to compete more widely and deftly via an expanded and deepened global footprint, along with a more integrated suite of products and services. To date, the promise of the strategy has yet to fully materialize. Continue reading “Baker Hughes Remains A Work In Progress”
With the long-awaited restatement of its financials and resolution of tax issues expected to be completed shortly, Weatherford is looking to put one of the gloomiest chapters in its history behind it. And while the company faces challenges going forward, there’s evidence it could be closer than one might suspect to finding its natural place in the world.
An amalgam of acquired companies that provides everything from contract-drilling services to downhole completion tools, Weatherford has always possessed potential. Even its oilfield competitors acknowledge this. Yet, this potential has continually been arrested by an ongoing string of issues that, in whac-a-mole fashion, never seem to stop popping up. Continue reading “Can Weatherford Rise From The Ashes?”
