Summary of the Conference Call on the Oil Services Industry Industry Overview - The report focuses on the oil services industry, specifically the period from 2000 to 2050, highlighting the evolution and future outlook of the sector [6][11]. Key Periods in the Oil Services Journey - The journey is divided into five periods: 1. The Golden Age (2000-2014) 2. The Great Disruption (2015-2024) 3. Drill, Baby Drill (2025-2029) 4. The Age of Sustainability (2030-2035) 5. The Age of Circularity (2036-2050) [11]. Core Insights and Arguments - The oil market is currently perceived as oversupplied, with a short-term supply increase peaking in early 2025, but a rapid rebalancing is anticipated in 2026 [7][9]. - A significant IEA report indicates that 90% of current oil and gas capital expenditures (capex) are for maintaining production rather than increasing it, suggesting a structural under-supply in the long term [10]. - The need for new drilling is underscored by projected decline rates of oil production, estimated at approximately 8% CAGR post-2025, necessitating new investments [15]. Investment and Capex Plans - Aramco's CFO highlighted the importance of massive investments in subsurface data acquisition and computing power, indicating a shift towards more data-driven operations [18]. - ADNOC announced a $150 billion capex plan for 2026-2030, aimed at maintaining operations and meeting growing global energy demand [25]. - Argentina's Vaca Muerta shale play is experiencing rising oil production, with production surpassing 447,000 barrels per day in March 2025, although rig counts remain historically low [20][23]. Market Dynamics and Future Projections - The report suggests that the current "Drill, Baby Drill" cycle may peak around 2028, driven by various factors including new offshore basins with low break-even prices and increasing global oil demand [29][38]. - SLB, Saipem, and Tenaris have forecasted a rebound in upstream spending in Saudi Arabia, indicating improved prospects for the oil services industry [39]. Company-Specific Insights - SLB is positioned as a key beneficiary of the improved market outlook, particularly in the Middle East, with a market share of nearly 10% in the region [39]. - Subsea 7 and Saipem are expected to create a new entity, "Saipem7," which will enhance their competitive positioning in the subsea market [44]. - Technip Energies is projected to have a record year for order intake in 2026, with several significant projects likely to be sanctioned [45]. Pricing Power and Market Conditions - The pricing power thesis for Tenaris and Vallourec remains intact, supported by tight capacity for premium tubes and rising costs [33]. - The report anticipates a gradual recovery in pricing conditions starting from the second half of 2026 as inventories clear [33]. Conclusion - The oil services industry is undergoing significant changes, with a focus on innovation, investment in technology, and a shift towards sustainability. The upcoming years are expected to bring both challenges and opportunities as companies adapt to evolving market dynamics and increasing global energy demands [11][39].

Core Insights - SLB N.V. is a global technology company in the energy sector with a market cap of $54.1 billion, focusing on digital solutions, reservoir performance, well construction, and production systems [1] - The company is classified as a large-cap stock, offering a wide range of services from drilling to production optimization [2] Stock Performance - SLB shares have decreased 18.9% from their 52-week high of $44.66, underperforming the Dow Jones Industrials Average, which rose 4.6% over the same period [3] - Year-to-date, SLB stock is down 5.5%, while the Dow Jones has gained 12.2%; over the past 52 weeks, SLB shares have dropped 17% compared to a 6.7% increase in the Dow Jones [4] - The stock has been trading below its 200-day moving average since last year but has recently moved above its 50-day moving average [4] Financial Performance - In Q3 2025, SLB reported an adjusted EPS of $0.69, which was better than expected; however, shares fell due to management's indication of no significant increase in North American drilling activity [5] - International revenue declined by 7% to $6.92 billion, and global revenue dropped by 9% when excluding the ChampionX acquisition [5] Competitive Position - SLB has underperformed compared to Exxon Mobil Corporation, which has seen a YTD increase of 7.8% and a 1.5% decline over the past 52 weeks [6] - Despite the stock's underperformance, analysts maintain a bullish outlook, with a consensus rating of "Strong Buy" and a mean price target of $47.08, representing a 29.9% premium to current levels [6]

Core Insights - Fluidsdoc is a seasoned expert in the oil industry with 40 years of experience across six continents and over twenty countries, specializing in the upstream oil sector [1] Group 1: Company Overview - Fluidsdoc leads The Daily Drilling Report, an investment group that provides analysis for the oil and gas industry [1] - The group features a model portfolio that encompasses all segments of upstream oilfield activity, offering weekly updates [1] - Investment ideas are provided for both U.S. and international energy companies, covering a range from shale to deepwater drillers [1] Group 2: Analytical Approach - The group employs technical analysis to identify catalysts within the oil and gas sector [1]

Core Insights - The article highlights the investment strategies and achievements of Paul Franke, a seasoned investor with 39 years of trading experience, emphasizing his contrarian stock selection style and the development of a system called "Victory Formation" for identifying stocks based on supply/demand imbalances [1] Group 1: Investment Strategies - Paul Franke recommends a diversified approach by owning at least 50 well-positioned stocks to achieve regular stock market outperformance [1] - The "Bottom Fishing Club" articles focus on deep value candidates or stocks that are experiencing significant upward momentum reversals [1] - The "Volume Breakout Report" articles discuss positive trend changes supported by strong price and volume trading actions [1] Group 2: Performance and Recognition - Franke was consistently ranked among the top investment advisors nationally during the 1990s and achieved the 1 position in the Motley Fool® CAPS stock picking contest in 2008 and 2009 out of over 60,000 portfolios [1] - As of September 2025, he was ranked in the Top 4% of bloggers by TipRanks® for 12-month stock picking performance based on suggestions made over the last decade [1] Group 3: Risk Management - Franke suggests investors implement stop-loss levels of 10% or 20% on individual stock choices to manage risk effectively [1]

Core Insights - The three major international oil service companies, Baker Hughes, Halliburton, and Schlumberger, reported significant declines in net profits for the third quarter due to oversupply in the global oil market and persistently low international oil prices. However, the CEOs of these companies provided positive evaluations of their third-quarter performance [1]. Baker Hughes - Baker Hughes reported a net profit of $609 million for Q3, a 20% decrease year-over-year from $766 million, and a 13% decrease from Q2's $701 million [2]. - The adjusted EBITDA for Q3 was $1.238 billion, showing a 2% increase both year-over-year and quarter-over-quarter [2]. - The company’s total revenue for Q3 was $7.01 billion, a slight increase of 1% from both Q2 and the same quarter last year [3]. - Baker Hughes' order intake reached $8.207 billion in Q3, marking a 23% increase year-over-year and a 17% increase from Q2 [2]. Halliburton - Halliburton's net profit for Q3 was $18 million, a staggering 97% decline from $571 million year-over-year and a decrease from $472 million in Q2 [4]. - The total revenue for Q3 was $5.6 billion, remaining relatively stable compared to Q2 but down from $5.697 billion in the same quarter last year [7]. - The company’s operating income for Q3 was $356 million, a significant drop from $871 million year-over-year [8]. Schlumberger - Schlumberger reported a net profit of $739 million for Q3, down 38% from $1.186 billion year-over-year and a 27% decrease from Q2's $1.014 billion [9]. - The total revenue for Q3 was $8.928 billion, reflecting a 4% increase from Q2 but a 3% decrease from the same quarter last year [9]. - The company’s adjusted EBITDA for Q3 was $2.061 billion, a 12% decrease year-over-year [9].

Core Viewpoint - SLB is experiencing a mixed performance in the stock market, with upcoming earnings expected to show a decline in EPS but a slight increase in revenue compared to the previous year [1][2][3]. Group 1: Stock Performance - SLB's stock closed at $35.71, down 1.33%, underperforming the S&P 500's gain of 1.55% [1]. - Over the last month, SLB's shares increased by 1%, outperforming the Business Services sector's loss of 4.49% and the S&P 500's loss of 1.8% [1]. Group 2: Earnings Estimates - SLB is projected to report an EPS of $0.74, reflecting a 19.57% decline year-over-year [2]. - The Zacks Consensus Estimate for revenue is $9.53 billion, indicating a 2.64% increase from the same quarter last year [2]. Group 3: Fiscal Year Projections - For the entire fiscal year, earnings are estimated at $2.89 per share, down 15.25% from the prior year, with revenue projected at $35.78 billion, a decrease of 1.4% [3]. - Recent adjustments to analyst estimates for SLB may indicate changing business trends, with positive revisions suggesting a favorable business outlook [3]. Group 4: Zacks Rank and Valuation - The Zacks Rank system, which assesses estimate changes, currently ranks SLB at 3 (Hold), with a recent 0.03% decline in the consensus EPS estimate [5]. - SLB's Forward P/E ratio is 12.52, which is a discount compared to the industry average of 19.17 [6]. Group 5: Industry Context - The Technology Services industry, part of the Business Services sector, has a Zacks Industry Rank of 75, placing it in the top 31% of over 250 industries [6]. - The Zacks Industry Rank indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7].

Group 1 - BP plc has awarded a contract to the OneSubsea joint venture for a subsea boosting system for the Tiber project, a deepwater development offshore the United States [1] - The OneSubsea joint venture, formed by SLB, Aker Solutions, and Subsea7, also secured a similar contract for BP's Kaskida project in the Gulf of Mexico, both targeting the complex Paleogene reserves [2] - The subsea boosting systems are designed to enhance recovery rates and efficiency in deepwater environments, optimizing space and reducing power usage [3] Group 2 - BP announced a final investment decision on the Tiber-Guadalupe project, which will be its seventh production hub in the Gulf of America, with a capacity of 80,000 barrels of crude oil per day, expected to start production in 2030 [4] - BP currently holds a Zacks Rank 3 (Hold), while other energy sector stocks like Oceaneering International and Canadian Natural Resources have higher rankings [5] - Oceaneering International provides integrated technology solutions across the offshore oilfield lifecycle, ensuring steady revenue growth [6] - Canadian Natural Resources is a major independent energy company in Canada with a diversified portfolio and a long history of dividend increases [7] - FuelCell Energy focuses on low-carbon energy solutions and is expected to play a significant role in the energy transition [9]

Core Viewpoint - SLB has shown a positive stock performance recently, outperforming the S&P 500 and the Zacks Technology Services industry, raising questions about its future stock trajectory [2]. Earnings Estimate Revisions - SLB is expected to report earnings of $0.74 per share for the current quarter, reflecting a year-over-year decrease of 19.6%, with a recent consensus estimate increase of 1.5% [5]. - The consensus earnings estimate for the current fiscal year is $2.89, indicating a year-over-year decline of 15.3%, with a slight increase of 0.9% in the last 30 days [5]. - For the next fiscal year, the earnings estimate is $2.95, showing a 2% increase from the previous year, with a recent change of 1% [6]. - SLB holds a Zacks Rank 3 (Hold), indicating a neutral outlook based on earnings estimate revisions [7]. Projected Revenue Growth - The consensus sales estimate for the current quarter is $9.53 billion, representing a year-over-year increase of 2.7% [11]. - For the current fiscal year, the revenue estimate is $35.78 billion, indicating a decline of 1.4%, while the next fiscal year's estimate is $37.46 billion, reflecting a growth of 4.7% [11]. Last Reported Results and Surprise History - In the last reported quarter, SLB generated revenues of $8.93 billion, a decrease of 2.5% year-over-year, with an EPS of $0.69 compared to $0.89 a year ago [12]. - The reported revenues were in line with the Zacks Consensus Estimate, showing a surprise of -0.02%, while the EPS exceeded expectations by 4.55% [12]. - Over the past four quarters, SLB has surpassed consensus EPS estimates three times and revenue estimates twice [13]. Valuation - SLB's valuation metrics, including price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), are essential for assessing whether the stock is fairly valued [14][15]. - The Zacks Value Style Score rates SLB as an A, indicating it is trading at a discount compared to its peers [17].

Core Viewpoint - SLB's acquisition of ChampionX Corp. for $7.8 billion aims to enhance its portfolio amid aging shale fields, while the company faces scrutiny for its continued operations in Russia despite sanctions [2][5][6] Group 1: Acquisition and Market Position - SLB agreed to acquire ChampionX Corp. for $7.8 billion in an all-stock deal, which will strengthen its position in the oilfield services market [2] - The acquisition is seen as a strategic move to provide better technology to U.S. drillers as they seek to maintain oil and gas production from aging shale fields [2] Group 2: Continued Operations in Russia - Despite U.S. sanctions imposed in January 2025, SLB has been reported to continue transferring proprietary drilling technology to Russian manufacturers as late as February 2025 [3][4] - SLB generated $1.4 billion in revenue from Russia in 2024, accounting for approximately 4% of the company's global total, indicating a significant ongoing presence in the Russian market [6] - The company has been criticized for its role in the Russian oil-service market, occupying 8% and contributing over $4.5 billion in taxes to the Russian economy [5][6] Group 3: Regulatory and Enforcement Challenges - SLB operates through a complex corporate structure that complicates U.S. enforcement of sanctions, allowing it to navigate regulatory gray areas [12][15] - The enforcement of sanctions has reportedly loosened under the current political climate, providing SLB with more flexibility in its operations [13][14] - The company has been actively recruiting young Russian engineers, suggesting a long-term commitment to its operations in Russia [9]

Ariel Investments, an investment management company, released its “Ariel Focus Fund” third-quarter investor letter.  A copy of the letter can be downloaded here. US equities increased significantly in the third quarter, driven by the Federal Reserve’s first rate cut, strong corporate earnings growth, and broadening market participation. In this environment, the fund increased by 20.76%, outperforming the 5.33% gain for the Russell 1000 Value Index and the 8.12% return for the S&P 500 Index. In addition, ple ...