LONDON, January 25, 2013 /PRNewswire/ --
Oil and gas industry is lately been plagued by uncertainty in international oil prices. Demand and supply mismatched coupled with constant pricing pressure is detrimental to all the component sub-sectors of the industry. The sector lagged behind the returns offered by S&P 500 and disappointed the investors. StockCall technical analysts posted their recent research on Nabors Industries Ltd. (NASDAQ: NBR) and Patterson-UTI Energy Inc. (NASDAQ: PTEN). These reports are free of charge and can be downloaded now at http://www.stockcall.com/analysis
Oil and gas drillers and exploration companies are not immune to this malady either. However, there are a couple of quality-drilling companies with solid fundamentals, which can weather the storm and still provide good returns to the investors. Nabors Industries is among the leaders in oil and gas exploration sector. The company is currently being touted as a potential takeover target, which may lead to substantial value creation for the stockholders. Similarly, Patterson-UTI Energy Inc. [Free Report on PTEN] , a provider of services to drillers and oil exploration companies, is likely to benefit from fall in gas reserves in the U.S.
Nabors to Focus on Drilling
Nabors Industry offered negative returns in the past 12 months and the pressure of declining oil and gas prices is clearly visible through its stock price, which has consistently trailed down since early 2012, but picked up later in the year. The driller is currently being scrutinized for its rather lax management. Nabors Industry is planning to consolidate its position and focus on drilling operations. It is planning to hive off its non-core assets like logistic operations and oil field stakes. The main area of the concern is the lack of activity on the part of management. Despite the fact that Nabors decided to sell its non-core assets early last year, the process is still under progress and has not made much headway. Sign up today and read StockCall analysis on Nabors Industries at http://www.StockCall.com/NBR012513.pdf
However, the stock is currently trading at attractive valuations and thus offers good entry price point. It is expected to infuse additional liquidity with its plans to sell off its non-essential assets. The sale is likely to add as much as $800 million to its coffers. Oil and gas demand is also expected to bottom out and is likely to ease pressure on the company. Nabors is also expected to address its internal operational issues, as its bigger investors including Pamplona Capital Management have started to exert influence over the management.
Patterson-UTI Energy and Increase in Drilling Activities
Patterson-UTI Energy changed guards last year and its new CEO is bringing about a shift in focus. The stock, like its peers, remained under pressure in 2012 but picked up later in the year, thanks to better demand and supply ratio in the market. The company is also improving its drilling fleet, which will bring about better efficiency. Patterson-UTI Energy is one of the largest on-shore contract drillers and is expected to benefit from renewed interest in drilling activities. Apart from fundamentals, the stock also has attractive multiples. It is trading at Price Earnings ratio of 9.40, making it an inexpensive stock to own.
Oil and energy is sector is expected to come out of its supply excess in year 2013 and the pressure on the stocks is also likely to ease. In such case, fundamentally strong stocks like Nabors and Patterson-UTI Energy are well positioned to show good rally.
- Patterson-UTI Energy Inc. Technical Analysis [ http://www.StockCall.com/PattersonUTIEnergyInc012513.pdf ]
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