Nearly 10 months after the Deepwater Horizon exploded in the Gulf of Mexico last April, killing 11 workers and spilling nearly 5 million barrels of oil into the ocean, a federal judge in New Orleans on Feb. 18 ordered the Obama administration to resume permits for drilling new deepwater oil wells in the area, according to the New York Times (http://www.nytimes.com/2011/02/18/business/energy-environment/18oil.html?_r=1&ref=business). Judge Martin Feldman ruled that the permitting delays were “inexcusable” and were forcing drilling companies to shift their rigs out of the gulf and to foreign waters.
That doesn’t mean drilling will start again immediately. The Obama administration is still insisting that offshore drillers demonstrate that they can quickly contain any spill before it will give the go-ahead for drilling in waters deeper than 500 feet. But this ruling should be good news for smallcap drilling and drilling services companies, which we have covered before during the spill. Here are a few we have covered in recent blog posts.
Houston-based Cal Dive International (NYSE:DVR, http://www.caldive.com ), a contractor of offshore platform, diving and underwater pipelay services with a market cap of $609 million, is currently trading at about $6.50 a share, a bit off its 52-week high of $7.97, which it hit last April, just before the problems in the Gulf. As we noted recently in another blog entry, Investopedia picked DVR in early January as one of six stocks (and one of the few small companies) that will profit from ongoing Gulf infrastructure upgrades.
Texas-based Lufkin Industries(Nasdaq:LUFK, http://www.lufkin.com/) is a $2.2 billion market cap company that sells, manufactures and repairs oil field pumping units and not a smallcap we would generally cover. But for comparison sake, the company has continued to trade in the $75 range, toward the top of its 52-week range of $35.13 to $78.89 It has climbed steadily since September 2010, when it was trading at abouto $37.
Tetra Technologies, Inc. (NYSE:TTI, http://www.tetratec.com/) operates as a diversified oil and gas services company in three divisions: Fluids, Offshore and Production. It is a $962 million market cap company based in The Woodlands, TX and it, too has been on the upswing lately. On Feb. 24 it closed at $12.63 with a volume of nearly 680,000 shares. It, too, has been on the upswing since last September when it was trading at about $8.50. The 52-week range is $8 to $14.64, and the average three-month volume is more than 632,000 shares a day.
Tulsa, OK- based Matrix Service Company (Nasdaq:MTRX, http://www.matrixservice.com/), with a market cap of $290 million, specializes in helping oil companies with infrastructure needs and provides repair, construction and maintenance services to the energy sector in the US and Canada. Its stock price has gone from $12.77 to $13.78 since the judge’s ruling. Its 52-week range is $8.25 to $14.32.
The smallest company in our brief survey is CE Franklin Ltd (Nasdaq:CFK, http://www.cefranklin.com/) a microcap based in Calgary with a market cap of $157 million. While a bit far flung from the gulf, the company distributes and repairs oilfield equipment– pipes, valves and flanges. On Feb. 25 it closed at $9.00, down $0.15, on 4,030 shares for the entire day. Its 52-week range is $5.79 to $9.60, and its average three-month volume is 8,752 shares a day.