Baker Hughes Eyeing Shale Oil

Baker Hughes is seeking to buy Lufkin Industries Inc. (LUFK) as well as Key Energy Services Inc. (KEG) in an attempt to have a bigger share from the rise in U.S. shale-oil discovery. Baker Hughes that is a service provider to gas and oil companies is looking for possibilities to make more purchases.

With crude prices hovering around $100 per barrel, and rise of average cost for exploring as well as developing the energy source for the biggest U.S. producers by more than 6 times, oilfield-services suppliers are trying hard to assist energy firms to explore alternate resources of energy. Among U.S. oilfield-services firms, analysts expect Lufkin and Key Energy will increase earnings to record highs next year.

Tim Beranek, a Denver-based money manager that is an expert in energy firms at Cambiar, said that strategically it would certainly make a lot of sense. He said that assuming that the oil price remains in the range of $90 to $100; shares of oil services are very cheap keeping in view their earnings.

Gary Russell, spokesman at Houston-based Key Energy, did not reply to email or phone call to request a comment.

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Leo Pierson

About Leo Pierson

Former partner in a real estate management firm, Leo, has been active in the market for the last 8 years. Ex-blogger on penny stocks, now focused on long term growth stocks, Leo provides valuable market snapshots each day as part of our editorial team.

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