When we look at projections and forecasting models there are different market indicators that really get our attention. One of those is budgets for the larger public Oil Field Service Companies (OFS).
There is a general consensus in the market that budgets are starting to be created in a positive light. When the larger companies are putting capital in a cash-poor market, there is usually a good reason.
Yesterday Tsvetana Paraskova posted in Rigzone:
“The positive activity momentum we see in North America and international markets today, combined with our expectations for future customer demand, gives us conviction for an unfolding multi-year upcycle,” Jeff Miller, Halliburton’s chairman, president, and CEO, said last month in the Q2 results release.
“With oil price at elevated levels, the supply response to this demand recovery is developing broadly as anticipated. Indeed, this combination has resulted in a call on short-cycle production as well as an uptick in long-cycle project, reflected in new FIDs and encouraging recovery in both offshore developments and near-field exploration activity through the second quarter,” Schlumberger CEO Olivier Le Peuch said on the Q2 earnings call.
The Permian will continue to lead the way in active rig gains, Helmerich & Payne says.
The Bottom Line
When your research is showing positive growth projections, having the data backing up those numbers is critical. Looking at many industry leaders putting cash back into E&P projects is the ultimate double-check.
When a multi-year cycle showing up, that is when the industry takes a turn. In the commodities markets, there will always be ups and downs along the road.
When I look at life, business, and the world coaches have provided some great insights. “Coaches win practices, players win games.” – Pete Carril
You have to be a player in the oil field to win the rewards others see.