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Sector Snap: Oilfield Services Stocks Climb

The Associated Press

SIOUX FALLS, S.D. (AP) — FBR Capital Markets upgraded several oilfield services and drilling companies Tuesday, predicting an earnings rebound in 2011.

Shares of Key Energy Services Inc. climbed 46 cents, or 7.7 percent, to $6.40 in afternoon trading after FBR named it as its small-cap top pick. FBR rates the Houston-based company "Outperform."

FBR said Key should benefit from the completion of wells drilled in the first half of 2009 and growth in Mexican onshore oil development.

The investment bank kept Weatherford International Ltd. as its large-cap top pick with an "Outperform" rating. Shares of Weatherford gained $1.13, or 5.6 percent, to $21.39.

In the offshore drilling segment, FBR said it prefers Switzerland-based Transocean Inc. because the company has the strongest contract backlog in the sector. FBR reiterated its "Outperform" rating and raised its price target to $110.

Transocean was up $2.34, or 2.9 percent, to $83.77.

The bank upgraded Houston-based Diamond Offshore Drilling Inc. and raised its price target to $97 as higher oil prices should continue to lessen the degree of decline for the weaker second- and third-generation floater market.

Diamond Offshore shares rose $3.49, or 4 percent, to $91.90.