Lowering U.S. Land Drillers FVEs on Revised Rig Count Forecast; Companies Look Very Overvalued
We’re lowering our fair value estimates for U.S. land drillers, owing chiefly to a lowered midcycle forecast for the U.S. horizontal rig count (from about 800 previously to 700 now). Our Nabors fair value estimate moves to $6 per share from $6.50; that for Precision decreases to $2.25 from $3; that for Patterson to $13.25 from $13.50; and that for Helmerich & Payne to $40 from $41. Our no-moat ratings for these companies remain in place. Overall, U.S. land drillers look very overvalued, on a...Precision Drilling is engaged in the provision of contract drilling and completion and production services primarily to oil and natural gas exploration and production companies in Canada and the United States. Co. operates two segments: Contract Drilling Services and Completion and Production Services. The Contract Drilling Services segment includes drilling rigs, directional drilling, procurement and distribution of oilfield supplies, and manufacture, sale and repair of drilling equipment. The Completion and Production Services segment includes service rigs, snubbing units, oilfield equipment rental, camp and catering services, and wastewater treatment units.
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