Table of Contents
FIGURE 1A: RATINGS, PRICE TARGETS, AND ESTIMATES .....................................................................................................4
FIGURE 1B: RATINGS, PRICE TARGETS, AND MULTIPLES .....................................................................................................5
INVESTMENT THESIS ..........................................................................................................................................................6
Figure 2: ASSETS of MONEY MARKET MUTUAL FUNDS......................................................................................................8
CYCLE CHARACTERISTICS .............................................................................................................................................10
COMMODITY PRICES ................................................................................................................................................15
NORTH AMERICAN ACTIVITY .......................................................................................................................................18
LICENSE TO DRILL: USING PERMITS TO GET COMFORT ON NEAR-TERM DRILLING OUTLOOK ................................23
THE WHO, WHAT, AND WHEN OF OFFSHORE DRILLING..........................................................................................38
SUBSEA EQUIPMENT....................................................................................................................................................41
ONSHORE DRILLING .....................................................................................................................................................43
VALUATION..................................................................................................................................................................45
SEASONALITY ...........................................................................................................................................................45
Initiating ATW at Accumulate and $39 PT ................................................................................................................48
Initiating BHI at Buy and $55 PT...............................................................................................................................49
Initiating BAS at Buy and $11 PT..............................................................................................................................50
Initiating BJS at Neutral and $16 PT..........................................................................................................................51
Initiating CAM at Accumulate and $35 PT ................................................................................................................52
Initiating CLB at Buy and $108 PT .............................................................................................................................54
Initiating DO at Accumulate and $100 PT.................................................................................................................55
Initiating ESV at Neutral with $43 PT........................................................................................................................57
Initiating FTI at Accumulate and $47 PT ...................................................................................................................58
Initiating HAL at Accumulate with $29 PT.................................................................................................................59
Initiating KEG at Buy and $8 PT................................................................................................................................61
Initiating NOV at Neutral and $42 PT........................................................................................................................63
Initiating NE at Buy and $48 PT................................................................................................................................64
Initiating PKD at Buy and $6.50 PT............................................................................................................................65
Initiating PTEN at Neutral and $14 PT.......................................................................................................................66
Initiating PDE at Neutral and $28 PT.........................................................................................................................68
Initiating RDC at Neutral and $22 PT ........................................................................................................................69
Initiating SLB at Accumulate and $71 PT ..................................................................................................................70
Initiating SII at Neutral with $35 PT ..........................................................................................................................71
Initiating RIG at Buy and $110 PT .............................................................................................................................72
Initiating WFT at Buy and $31 PT.............................................................................................................................73
RISK ANALYSIS........................................................................................................................................................74
SMH CAPITAL DISCLOSURES ......................................................................................................................................80