Pritchard Capital Out With Industry Update On Oil Services (FTI, HAL, SPN)

Pritchard Capital is out with an industry report on the oil services sector. Its top long ideas are Ensco plc ESV, FMC Technologies, Inc. FTI, Halliburton Company HAL, RPC, Inc. RES and Superior Energy Services, Inc. SPN. In the report Pritchard Capital notes, "In light of the SWSI and NBR deal, and PTEN expansion of its hydraulic fracturing business with the acquisition of Key Energy Services, Inc.’s (KEG-$8.53) pressure pumping assets, we are seeing the emergence of a business model that combines drilling and fraccing on a relatively large scale. With two of the smaller players now out of the game, the spotlight is now on RES and Complete Production Services, Inc. (CPX-$17.15), which are adding 140,000 and 100,000 HHP, respectively, by early 2011. Applying SWSI’s 5x 2011 EV/EBITDA multiple for pressure pumping assets and a 4.5x multiple to the other businesses, we believe RES and CPX could potentially realize 35% to 45% upside under a takeout scenario."