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Goldman Sachs Pounds the Table on 5 Sizzling Oilfield Services Leaders as Oil Surges Toward $100

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The relentless climb of Brent and West Texas Intermediate crude since the summer has been one of the biggest stories on Wall Street recently, and with good reason. The entire purpose behind the Federal Reserve raising interest rates from 0% to 5.5% has been to tamp down the soaring inflation caused by egregious government spending, production shortages and supply chain issues, among other items. Just when things were looking brighter and inflation had tumbled from 9.1% in the summer of 2022 to the current level of 3.7%, oil took off.
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The reason for the surge has been steady demand and, most importantly, big production cuts from the Organization of the Petroleum Exporting Countries (OPEC) and the Saudi Arabia. While the price at the pump increase is difficult for consumers, the top oilfield services leaders are thriving, and Goldman Sachs points to the Middle East as a strong tailwind behind some of the top companies. The analyst team feels that five top companies are going to benefit in a big way and is strongly positive on the current landscape for these leaders.

While the following stocks are rated Buy, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Baker Hughes

This stock makes sense for investors looking for energy exposure via services. Baker Hughes Co. (NYSE: BKR) provides a portfolio of technologies and services to the energy and industrial value chain worldwide.

The company offers exploration, drilling, wireline, evaluation, completion, production and intervention services, as well as drilling and completions fluids, wireline services, downhole completion tools and systems, wellbore intervention tools and services, pressure pumping systems, oilfield and industrial chemicals, and artificial lift technologies for oil and natural gas and oilfield service companies.

Baker Hughes also provides subsea and surface wellheads, pressure control and production systems and services, flexible pipe systems for offshore and onshore applications, and life-of-field solutions, including well intervention and decommissioning solutions, as well as services related to onshore and offshore drilling and production operations. In addition, the company offers equipment and related services for mechanical-drive, compression and power-generation applications across the oil and gas industry. Its product portfolio includes drivers, compressors and turnkey solutions, as well as pumps, valves and compressed natural gas and small-scale liquefied natural gas solutions.


Further, the company provides sensor-based process measurements, machine health and condition monitoring, asset strategy and management, control systems, as well as non-destructive testing and inspection and pipeline integrity solutions. Baker Hughes serves upstream, midstream, downstream, onshore, offshore and industrial customers.

Shareholders receive a 2.23% dividend. Goldman Sachs has a $42 price target on Baker Hughes stock, and the consensus target is $40.33. Wednesday’s closing share price was $36.25.

Expro

While not as well known as the other Goldman Sachs favorites, this company may have among the largest upside potential. Expro Group Holdings N.V. (NYSE: XPRO) engages in the provision of energy services in North and Latin America, Europe, the Middle East, the Asia-Pacific and elsewhere.
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The company provides well construction services, such as technology solutions in drilling, tubular running services and cementing and tubulars. Its well management services include well flow management, subsea well access and well intervention and integrity services. It serves exploration and production companies in onshore and offshore environments in approximately 60 countries.

Last month the company acquired PRT Offshore, which is also based in Houston, Texas, and is the only company to provide a complete Hook-to-Hanger solution enabling comprehensive well completions, interventions and decommissioning services from surface to subsea. Its unique system is designed to allow customers to access the wellbore safely and efficiently, all while reducing personnel on board.

The $25 Goldman Sachs target price is likely to rise soon. The consensus target is $26.60, and Wednesday’s close at $24.78 was up close to 3% for the day.

Halliburton

This is one of the premier oilfield services companies and is always a solid bet for those looking for exposure to the sector. Halliburton Co. (NYSE: HAL) provides products and services to the energy industry worldwide. It operates in two segments.

The Completion and Production segment offers production enhancement services that include stimulation and sand control services; cementing services, such as well bonding and casing, and casing equipment; completion tools that offer downhole solutions and services, including well completion products and services, intelligent well completions and service tools, as well as liner hanger, sand control and multilateral systems; production solutions comprising coiled tubing, hydraulic workover units, downhole tools and pumping and nitrogen services; and pipeline and process services, such as pre-commissioning, commissioning, maintenance and decommissioning. This segment also provides electrical submersible pumps, as well as artificial lift services.

The Drilling and Evaluation segment offers drilling fluid systems, performance additives, completion fluids, solids control, specialized testing equipment and waste management services; oilfield completion, production and downstream water and process treatment chemicals and services; drilling systems and services; wireline and perforating services consists of open-hole logging, and cased-hole and slickline; and drill bits and services comprising roller cone rock bits, fixed cutter bits, hole enlargement and related downhole tools and services, as well as coring equipment and services.
This segment also provides cloud-based digital services and artificial intelligence solutions on an open architecture for subsurface insights, integrated well construction and reservoir and production management; testing and subsea services, such as acquisition and analysis of reservoir information and optimization solutions; and project management and integrated asset management services.

Investors receive a 1.57% dividend. The Goldman Sachs target price of $43 also is likely to move higher soon. Halliburton stock has a consensus target of $44.77. Shares closed 3% higher on Wednesday at $42.03.
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Schlumberger

This is another mega-cap service company that is a leader around the world. Schlumberger Ltd. (NYSE: SLB) engages in the provision of technology for the energy industry worldwide.

The company provides field development and hydrocarbon production, carbon management, integration of adjacent energy systems; reservoir interpretation and data processing services for exploration data; and well construction and production improvement services and products. It also offers subsurface geology and fluids evaluation information; open and cased hole services; exploration and production pressure and flow-rate measurement services; and pressure pumping, well stimulation and coiled tubing equipment solutions.

In addition, Schlumberger offers mud logging, directional drilling, measurement-while-drilling and logging-while-drilling services, as well as engineering support services; supplies drilling fluid systems; designs, manufactures and markets roller cone and fixed cutter drill bits; bottom-hole-assembly and borehole enlargement technologies; well cementing products and services; well planning, well drilling, engineering, supervision, logistics, procurement and contracting of third parties, as well as drilling rig management solutions; and drilling equipment and services, as well as land drilling rigs and related services.


Further, it provides artificial lift production equipment and optimization services; supplies packers, safety valves, sand control technology and various intelligent well completions technology and equipment; designs and manufactures valves, chokes, actuators and surface trees; and OneSubsea an integrated solutions, products, systems and services, including wellheads, subsea trees, manifolds and flowline connectors, control systems, connectors and services.

Schlumberger comes with a 1.67% dividend. Goldman Sachs has set its target price at $65, while the consensus target is $62.84. Wednesday’s $60.80 close was up almost 3% on the day.

Weatherford

This stock has been on a big roll and could be poised to break out to all-new 52-week highs. Weatherford International PLC (NASDAQ: WFRD) an energy services company, provides equipment and services for the drilling, evaluation, completion, production and intervention of oil, geothermal and natural gas wells worldwide.
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The company offers artificial lift systems, including reciprocating rod, progressing cavity pumping, gas, hydraulic, plunger and hybrid lift systems, as well as related automation and control systems; pressure pumping and reservoir stimulation services, such as acidizing, fracturing, cementing and coiled-tubing intervention; and software, automation and flow measurement solutions.

It also provides safety, downhole reservoir monitoring, flow control and multistage fracturing systems, as well as sand-control technologies and production and isolation packers; liner hangers to suspend a casing string in high-temperature and high-pressure wells; cementing products, including plugs, float and stage equipment and torque-and-drag reduction technology for zonal isolation; and pre-job planning and installation services.


In addition, Weatherford offers directional drilling services and logging and measurement services while drilling; services related to rotary-steerable systems, high temperature and high-pressure sensors, drilling reamers and circulation subs; rotating control devices and advanced automated control systems, as well as closed-loop drilling, air drilling, managed-pressure drilling and underbalanced drilling services; open-hole and cased-hole logging services; and intervention and remediation services.

It also provides tubular handling, management and connection services; and re-entry, fishing and well abandonment services, as well as patented bottom hole, tubular-handling equipment, pressure-control equipment and drill pipe and collars.

Weatherford stock has a $101 price target at Goldman Sachs. The consensus target is higher at $110.6, but Wednesday’s close was at $93.93 a share, up almost 3.5% for the day.


The Goldman Sachs energy team is focused on the biggest and the best, and for good reason. These five companies dominate in an industry that is very capital intensive, and they all have been around for decades. The bottom line for investors is that, while nobody knows for sure where oil pricing will go over the next year, the biggest producers are intent on holding the line on production. As long as that is the case, prices can push past the $100 level.

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