We are initiating coverage of six US Oil Service and
Equipment companies with a BUY rating. These companies
include: Baker Hughes Incorporated, Cal Dive International,
Inc., Complete Production Services, Inc., Core Laboratories
N.V., Willbros Group, Inc., and W-H Energy Services, Inc.
• The International Energy Agency’s global oil demand
projections suggest that worldwide oil demand will grow
1.2% in 2007 and 2.3% in 2008.
• While concerns regarding US natural gas fundamentals
remain, we believe a majority of the negative sentiment is
reflected in the 2008 estimates, most of which have flat
year-over-year earning projections.
• The amount of dollars spent by E&P companies is the
primary driver of earnings growth for oil service companies.
We expect international spending to be up between 10%-
13% in 2008 versus 2007 and North American capital
spending to be flat with US spending increases offsetting
Canadian declines. As a result, we are projecting a 3%
increase in the Worldwide Rig Count in 2008 compared to
2007 levels. Our forecast reflects a 7% increase
internationally and a flat North American market.
• New technologies are contributing to more effective
exploration, development and production. Companies that
offer technologies that reduce operating costs, increase
efficiency and have reliability advantages should continue
to enjoy robust pricing and trade at premium valuations.
We favor oil service companies that have a strong
technology component, a commitment to technological
advancement, and a revenue base that is moving toward
higher margin, higher technology products.
• Valuations for the oilfield service group remain attractive
and reflect the low end of historical trading ranges. We
expect further share price appreciation into 2008 and
recommend an overweight position in the oil service and
equipment sector as we believe these stocks will continue
to outperform the broad markets. On average the oil
service stocks are trading at 14.5x forward 12-month
projections, virtually in line with the S&P 500, yet have
estimated earnings growth rates of 26% year-over year.

Table of Contents
Investment Thesis ................................................................................................................................ 3
Company Summaries........................................................................................................................... 8
Crude Oil Overview........................................................................................................................... 11
Crude Oil Price Forecast .................................................................................................................. 17
US Natural Gas Overview .................................................................................................................. 19
Natural Gas Price Forecast............................................................................................................... 22
Rig Count Overview ........................................................................................................................... 24
US Rig Count Overview .................................................................................................................. 25
Canadian Rig Count Overview ........................................................................................................ 28
Worldwide Rig Count Overview...................................................................................................... 30
Valuation Analysis & Stock Price Performance............................................................................... 38
Risk Factors........................................................................................................................................ 55
Baker Hughes Incorporated............................................................................................................... 58
Valuation & Investment Considerations .......................................................................................... 59
Company Overview ......................................................................................................................... 60
Management Team Profile............................................................................................................... 72
Institutional & Insider Holdings....................................................................................................... 73
Financials ........................................................................................................................................ 74
Cal Dive International, Inc................................................................................................................. 76
Valuation & Investment Considerations .......................................................................................... 77
Company Overview ......................................................................................................................... 78
Management Team Profile............................................................................................................... 88
Institutional & Insider Holdings....................................................................................................... 89
Financials ........................................................................................................................................ 90
Complete Production Services, Inc.................................................................................................... 92
Valuation & Investment Considerations .......................................................................................... 93
Company Overview ......................................................................................................................... 94
Management Team Profile............................................................................................................. 105
Institutional & Insider Holdings..................................................................................................... 106
Financials ...................................................................................................................................... 107
Core Laboratories N.V. .................................................................................................................... 109
Valuation & Investment Considerations ........................................................................................ 110
Company Overview ....................................................................................................................... 111
Management Team Profile............................................................................................................. 123
Institutional & Insider Holdings..................................................................................................... 124
Financials ...................................................................................................................................... 125
Willbros Group, Inc.......................................................................................................................... 128
Valuation & Investment Considerations ........................................................................................ 129
Company Overview ....................................................................................................................... 130
Management Team Profile............................................................................................................. 145
Institutional & Insider Holdings..................................................................................................... 146
Financials ...................................................................................................................................... 147
W-H Energy Services, Inc. ............................................................................................................... 150
Valuation & Investment Considerations ........................................................................................ 151
Company Overview ....................................................................................................................... 152
Management Team Profile............................................................................................................. 159
Institutional & Insider Holdings..................................................................................................... 160
Financials ...................................................................................................................................... 161
Important Disclosures ...................................................................................................................... 165