First-Quarter Review: Services and Equipment

Each earnings season, The Energy Strategist takes a detailed look at oil-field services giant Schlumberger’s (NYSE: SLB) quarterly results and subsequent conference call with analysts. One of the best-managed firms in the business, Schlumberger’s international reach and diverse operations–not to mention CEO Paal Kibsgaard’s candor about emerging trends in the energy patch–make the company’s quarterly conference calls must-attend events. In this issue, we analyze the key takeaways from Schlumberger’s earnings call and their implications for our investment strategy.

Some of the highlights from this quarter’s conference call include accelerating drilling activity in the deepwater Gulf of Mexico and a tightening market for marine seismic services as producers step up offshore exploration. I’ve also made a few changes to my Best Buys List, which highlights my favorite picks in the current market environment.

In This Issue

The Stories

1. Schlumberger’s first-quarter conference call reaffirmed our belief that the stock will outperform its peers in the coming year. Equally important, CEO Paal Kibsgaard’s commentary on developments in the oil and gas industry furnished a number of investable trends. Here’s a rundown of the key takeaways. See The World According to Schlumberger.

2. Paying close attention to the trends that Schlumberger highlights in its quarterly earnings releases and conference calls–and investing accordingly–often pays off. See Top Energy Growth Trends and How to Play Them.

The Stocks

Schlumberger (NYSE: SLB)–Buy < 100 in Growth Portfolio
(NYSE: HAL)–Hold in Energy Watch List
Weatherford International (NYSE: WFT)–Buy < 20 in Growth Portfolio
Petroleum Geo-Services (Oslo: PGS, OTC: PGSVY)–Buy < 17.50 in Aggressive Portfolio
SeaDrill (NYSE: SDRL)–Buy < 45 in Aggressive Portfolio
Ensco (NYSE: ESV)–Buy < 60 in Growth Portfolio
Pacific Drilling (NSDQ: PACD)–Buy < 11 in Aggressive Portfolio
US Silica
(NYSE: SLCA)–Buy < 19.50 in Aggressive Portfolio

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