What Does Less Exploration Mean For Oil Services Companies?
The latest feature over at HAI talks about recent well/rig data, and what reduced exploration efforts could mean for oil services companies--for example, Halliburton.
From Hard Assets Investor (excerpt):
"Right now, the market is much more concerned with inventory levels in the U.S. and demand trends than the number of exploratory wells being drilled. And given that U.S. oil inventories rose higher than expected (again) on Wednesday, it makes a lot of sense. But at some point, if exploration continues to decline, the industry, and the energy market, is going to have to pay the piper.
But until that happens, the reduction in exploration impacts primarily one industry: oil services and drilling companies.
Halliburton (NYSE:HAL) is one such company, and they're keenly aware of what's going on in exploration. And the picture they paint is interesting. It's not that no wells are being drilled at all, it's that they're being "banked" in a sense. They're being partially drilled, then mothballed, ready for completion as soon as there's money to be made."
The full article's available here: hardassetsinvestor.com |
