SLB To Soar Over $100
Schlumberger is one of our favorite oil service stocks for 2011, and it looks like they are making some good moves at the moment. With their stock anticipated to reach $105, they must have some new projects in works. The Trefis Team has discovered their recent acquisition and explains why it could lead SLB on the path of a $100 stock.
Schlumberger has acquired the remaining equity in the privately-held Framo Engineering AS. [1] The Norwegian firm will augment Schlumberger’s existing capabilities in subsea flow assurance and surveillance capabilities. This should help the company gain an edge over competitors likeHalliburton and Baker Hughes in the growing market for services that enhance production at declining oil fields…
…Framo’s Technology Has Strong Potential
The 500-member strong Framo Engineering is a leading player in the design and development of multiphase subsea pump & meter systems and other technology focused on the deepwater market. [1] Paal Kibsgaard, Chief Operating Officer of Schlumberger, commented that the transaction was an important step for the company in its efforts to provide solutions to improve hydrocarbon recovery and lower costs in the subsea environment…
…Deepwater Increasingly Important
Framo also specializes in other subsea systems for oil & gas exploration and production activity such as swivels and marine systems. Deepwater production is expected to rise significantly over the future, as in the last 10 years more than half of the oil and gas discoveries came from offshore locations. The IEA estimates that by 2030, almost a third of the oil demand may be met by offshore production…
Clearly, SLB is onto something and their recent acquisition is a display of that. They are looking to the future of the oil and gas industry, and this acquisition will put them on the right path to keep up with future trends. Halliburton and other large oil service companies are seeking similar opportunities. Looks like SLB is ahead of the curve.
Quotes taken from report by Trefis Team, Read the entire article here.
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