Raymond James Energy Stat of the Week
by J. Marshall Adkins

Energy Stat: OTC – No Prescription Needed
May 13, 2013

Conclusion: Offshore outlook improving while domestic land activity remains lackluster

We came away from this year's Offshore Technology Conference (OTC), the single biggest yearly exhibition of oilfield companies, with our views on the energy industry largely confirmed by conference chatter. Offshore activity continues to grow as operators look to develop recent discoveries. This has led to record bookings for manufacturers on the subsea and drilling equipment side, which is a theme we expect to continue for the foreseeable future. On the onshore side, the attitude was rather somber, though there were some signs of a bottoming or even slight pickup in demand on the pressure pumping side. Most land guys were "hopeful" that a strengthening gas market could lead to an increase in the gassy rig count (time will tell). While this may prove to be the case, we remain concerned about the back half of the year for U.S. land guys should WTI prices continue to soften. Bottom line: offshore and international attitudes and activity remain robust and full of optimism. The U.S. land players, on the other hand, seem to be finding a bottom, but their optimism is much more cautious.

This is a summary of a much more detailed commentary. Please contact your financial advisor for the full report.

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