This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Will vanishing oil provide a boost for these oil machinery suppliers?

Stocks in this article: BP CVX HAL NOV

Robbie Citrino, Kapitall: Increasingly hard to reach oil causes drillers to increase capital expenditures, boosting sales and profits for oil machinery suppliers.

The time of easy oil is long gone.

Once the process of finding oil was as simple as finding where it seeped out of the Texas ground. Now new technologies are utilizing ultrasound and radar to scan the sea floor miles below the surface.

With a steadily increasing demand for the sludge we all consume, the large oil conglomerates have been forced to search deeper into the earth, hiking up both their risk and their expenses.

But as the never-ending search for new reserves straps drillers, it remains liquid gold to oil machinery suppliers. Drillers are in a constantly shifting race to find the next sweet spot for oil – which requires increasingly expensive and elaborate machinery to gain access to.

This, tied to an increase in rig orders, has rocketed drillers’ capital expenditures up nearly 25% YoY, and sent its total to an unprecedented high of $723 Billion, a large portion of which directly lines the equipment suppliers’ pockets. Chevron’s (CVX) capital expenditures alone climbed around 70% since 2011, to almost $38 billion in 2013.

This boost in cash has knocked National Oilwell Varco’s (NOV) revenues up 64% since 2011 to nearly $23 billion annually, showing how they can rake in the riches off of the increasingly stretched situation of drillers.

As a solution to oil derived power has yet to prove profitable on a large scale, oil machinery manufacturers are well positioned to reap profits from the pressures upon companies working in different parts of the industry. 

Click on the interactive chart to view data over time. 

1. Chevron Corporation ( CVX): Engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. Market cap at $234.55B, most recent closing price at $123.21.

 

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs