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HistoricalPEGuy (67.55)

Oil Field Services: The Only Way to Play



February 26, 2011 – Comments (1) | RELATED TICKERS: XOM , SLB , BHI

Many companies stand to profit from the current uncertainty around oil.  XOM, COP and many others will do quite well.  That said, the real money is in Services. 

Why?  Small independants have found many new plays to get at oil.  The only problem - its really freaking expensive.  But now - with oil topping $100, these small independants are ready to invest. 

So how does a small player enter the market?  They hire SLB, BHI or HAL to drill the well. 

So why do you care?  The Service players have contracts with the big boys, but the independants pay a huge premium to get their wells drilled.  They have little to no negotitating power.

Result - OFS will do more HIGH MARGIN work.  Not only will revenues increase, but higher margin jobs become the norm. 

If your are looking for places to invest in oil, look no further than OFS (Oil Field Services).  ETFs like OIH and XES are a great place to start.

-- HPEGuy

1 Comments – Post Your Own

#1) On February 26, 2011 at 4:28 AM, JGWSTOCKS (96.31) wrote:

OIH and SLB have been black gold mines...  :)

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