Geez, I can't predict oil or natural gas prices and I don't think anyone really can. I worked for the drilling division of a large oil company and know darn well they couldn't predict prices.
We're in a dip now. After it bottoms out (where?), how far will it go up and for how long I just don't know.
With rig companies, sand companies, service companies, or drilling companies, you're really making a bet on crude and natural gas prices. Which like I said I don't believe anyone can really predict.
For long term investment, its safest to stick with the handful of big integrated companies. During price declines, the downstream side holds up and allows longterm safe dividend payments. Buy XOM or CVX when they're down and hold forever letting the dividends grow.
If you want to speculate in companies that are bets on crude and natural gas prices, I think its safest to do so with the lowest cost producers and location, location, location is #1,2 and 3 to me. Not all basins are created equal. The Permian basin in W TX is #1 for crude imo and the Marcellus is #1 for natural gas. Good producers in those two fields are PXD and COG, respectively. You'd have to follow the price over time and when you see a sharp move down, you have to use your judgment as to when to buy in anticipation of selling in the next bull market.
Also charts of some sand companies look interesting now, though I don't own any. FMSA, HCLP, SLCA. The amount of sand used in shale wells is increasing. BWDIK
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