Oil services stocks could gain from increased demand for land rigs as shale gas exploration picks up, Goldman Sachs analyst Waqar Syed writes in a bullish note today.
“Owing to the shale revolution, US land rig demand has just entered the second phase of a multi-year pick-up. This is a �higher quality, lower volatility� phase driven by drilling in oil bearing shales, entry of deep pocketed oil-majors/E&P companies, and requirement for large scale developments. By 2014-2015, US land rig demand should get another boost, as gas prices pick up and gas rig count, down 46% from peak, recovers.”
Syed is concerned that offshore drillers could suffer because of the� increased scrutiny on offshore energy exploration. Syed prefers the land drillers.
Syed’s top pick in the space is Halliburton (HAL), and Goldman also rates Baker Hughes (BHI)� Helmerich & Payne (HP) Patterson-UTI Energy (PTEN) and Weatherford International (WFT) at Buy.
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