The announcement this week that BP’s first new plan for drilling in the Gulf of Mexico, while only covering four exploratory wells nearly 200 miles offshore of Lousiana, has to be good news for drilling and drilling services companies. It comes about a year and a half after the Deepwater Horizon accident in April 2010 that spilled millions of barrels of oil, left 11 workers dead and has kept BP struggling, according to the New York Times (http://www.nytimes.com/2011/10/22/business/energy-environment/bp-plan-for-gulf-drilling-is-approved.html?_r=1&scp=1&sq=BP%20gulf%20drilling&st=cse).
The Times notes that drilling in the gulf is “coming back to normal” although the permitting process is now much slower than before the accident and compliance standards for deepwater drilling are much more strict. The proposed exploratory wells are more than 6,000 feet deep, actually deeper than the Deepwater Horizon well.
We last looked at five smallcaps that loosely fit this space in February (Please suggest others). Let’s see where they are now.
Houston-based Cal Dive International (NYSE:DVR, http://www.caldive.com/ ), a contractor of offshore platform, diving and underwater pipelay services, had a market cap of $609 million and was trading at about $6.50 a share in February. It closed Oct. 26 way off those marks at $2.02, up 7 cents on the day. It’s market value is now about $193 million.
Texas-based Lufkin Industries(Nasdaq:LUFK, http://www.lufkin.com/), a $2.2 billion market cap company in February, sells, manufactures and repairs oil field pumping units. It was trading in the $75 range back then, toward the top of its 52-week range of $35.13 to $78.89. It closed Oct. 26 at $54.97, up $2.07 or nearly 4 percent on the day.
Woodlands, TX-based 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 was a $962 million market cap company on the upswing last February 24 when it closed at $12.63 with a volume of nearly 680,000 shares. On Oct. 26 it closed at $9.75, up 50 cents on the day. Its market value is currently about $753 million.
Tulsa, OK- based Matrix Service Company (Nasdaq:MTRX, http://www.matrixservice.com/), with a market cap today of $289 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 closed at $10.90 on Oct. 26. Back in Febrary its market cap was about $290 million.
The smallest company in our brief survey is Calgary-based CE Franklin Ltd (Nasdaq:CFK, http://www.cefranklin.com/), a company that distributes and repairs oilfield equipment including pipes, valves and flanges. On Feb. 25 it closed at $9.00, down $0.15, on 4,030 shares for the entire day. On Oct. 26 it closed at $8.24 and currently has a market cap of about $144 million.