The
fracking boom and shale revolution has brought with it a substantial oil and
gas field services market which is estimated by IBISWorld as accounting for
upwards of 47% of the overall industry’s revenue generation. Their report out
in June of this year also indicates that the oil & gas field services
market posted a handsome 11.5% annual growth rate over the last five years and
now generates roughly $114B a year, providing good jobs to over 270k people.
Global Water Intelligence places the water management service and technology
segment alone at around $40B a year and projects a 6% CAGR moving forward.
Massive Houston-based oilfield services players, Schlumberger (NYSE: SLB;
$99.18) and Baker Hughes (NYSE: BHI; $51.89), certainly are experiencing the upside,
with the right mix of offerings allowing them to take increased profit margins
across their interests in North America, with Q1 revenues of $11.2B (up 5.7%)
and $1.9B (up 58.3%) respectively.
Oilfield
services is considered by many investors to be the industry’s low-risk sweet
spot, as operators in this market generally turn a profit irrespective of
whether or not a given play is successful. In the U.S. alone onshore rig counts
have climbed 3% in the last quarter, topping out at a two year high of 1.87k
rigs in action, with the Permian Basin in Texas a notable front-runner, posting
21% rig count growth year over year despite sagging oil prices. There seems to
be no end in sight for energy recovery growth and RBC Capital Markets’ estimate
of over 20k horizontal wells being drilled in the U.S. this year (add another
1k to that figure for next year according to RBC) means that the oilfield
services sector has their work cut out for them.
One of the
more attractive and share price-accessible targets for investors to take a look
at in this space is Intercept Energy Services (OTC: IESCF; $0.0375). The
company’s core, patent-pending superheater technology readily outperforms
typical gas and diesel-fired systems, with virtually 100% of heat input
transferred to the water. More importantly, the system has several notable
safety advantages over the industry standards when it comes to heating frac
water, while still achieving superior performance compared to other super
heaters, thanks to the company’s proprietary design advancements.
This
technology has the goods operators are looking for, with a super efficient
design that generates almost no radiant heat, has 23 MMBTU output capacity, a
12 plus hour supply at full burn and a 2m3/min volume temperature increase capability
of up to 40 degrees Celsius. Unlike other products on the market, Intercept
Energy’s systems do what it says on the tin; because after all, it doesn’t
matter what the unit’s BTU rating is if most of the heat simply ends up wasted
right out the stack. Moreover, the system’s numerous, state-of-the-art,
redundant safety shutdowns and controls, as well as the company’s long-standing
commitment to job site safety, means better overall site performance and a
reduction in (or outright avoidance of) accident-associated and inefficient
system-related downtimes.
Intercept
Energy’s system has no exposed flame and the entire system is safe to touch
(yet requires no insulation), without a single place (“hot spots” as they are
typically called) on the entire unit where workers can put a hand and get
burned. The dangerous possible ignition of flammable vapors, a constant hazard
for operators, is virtually eliminated with the design. IESCF proudly meets and
even exceeds provincial/federal standards when it comes to both occupational
health & safety, as well as environmental impact. The company’s super
heaters not only burn fuel cleanly/completely, the compact, rig-mounted system
leaves no footprint behind (no icing or system-derived emissions) when the job
is over.
The
company also has an excellent fleet of six (three more being built at last
count) thru-tubing, open-mouth power tong units (two each of air and electric
over hydraulic driven, diesel-powered units and two more diesel over hydraulic
driven units) that are field-safety proven and yet are faster and easier to
operate than the industry standard. These babies can bite on small operating
diameters of 1-11/16” to 3-1/2” pipes and can join pipes of different diameters
with ease. The units are packed in enclosed 16 foot trailers, coming complete
with over 100 feet of hydraulic hose and are set up specifically for coil
tubing applications (with the backup on top).
Primarily
focused on their BIG HEAT system’s proliferation throughout North America,
IESCF also has a developing secondary vector in oil sands processing, oilfield
waste disposal, and recovering reusable products from oilfield waste.
Learn more
about Intercept Energy Services by visiting www.InterceptEnergy.ca
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