Frequently, the best information parceled out by companies
occurs at investor conferences, where the audiences are
knowledgeable and the presenters recognize that they have to
put their best feet forward.
This week, Barclays Capital conducted its CEO Energy/Power
Conference that included presentations from a long list of
big energy names, including
ConocoPhillips (NYSE: COP),
EnCana (NYSE: ECA), and
Dominion Resources (NYSE: D). One of the
presenters was Bernard J. Duroc-Danner, CEO of
Weatherford International (NYSE: WFT). His
company providesa variety of services to oil and gas
companies during virtually all stages of the drilling
process.
Indeed, what may be Weatherford's biggest flaw of late has
been just how much of its business comes from North America,
where the rig count has fallen like a proverbial rock.
Specifically, about 33% of Weatherford's revenues are
generated in its home continent.
Moving east
It's noteworthy, however, that the targeted geographic
breakdown would have about 20% of 2013 revenues coming out of
North America, 25% from South America, and the remaining 55%
from the Eastern Hemisphere. The company also boasts high
revenue and earnings growth than its three major peers,
Schlumberger (NYSE: SLB),
Halliburton (NYSE: HAL), and
Baker Hughes (NYSE: BHI).
One of the keys to understanding Weatherford is that,
without a degree in engineering, you probably can't
… completely. But don't be concerned.
Suffice it to say that once producers move beyond the seismic
stage, Weatherford's broad range of services allows the
company to play a role in just about every other phase of the
production process, such as drilling, completion, and well
construction.
With his avowed desire to move his company's emphasis to
the south and east, Mr. Duroc-Danner foresees near-term
volatility in North America, mitigated over time by
production from shale, heavy oil, and deepwater activity. In
Latin America, his expectation is for growth in Mexico and
strength in Brazil. For the Eastern Hemisphere, he envisions
brighter times for the Middle East and North Africa, and a
recovery in activity within Russia and the rest of Asia.
From my perspective, given the company's range of
services, its determination to move rapidly into a
concentration in the Eastern Hemisphere, and crude prices
that are inching upward, I'm a slow steady buyer of
Weatherford stock. Of course, I recognize the need to have
enough patience to let Mr. Duroc-Danner and the world's crude
markets play their part in an energy recovery.
Weatherford International has been granted five-star
status by
Motley Fool CAPSplayers. Does that top-of-the-line rating
include
your assessment?
This article was originally published as
Think Oil's Going Up? Watch Weatherfordon
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