“The dawn is coming!” This phrase comes to mind as we observe valuations and prospects for oilfield service companies. It has been tough sledding for OFS companies during COVID. At the end of 2020, rig counts were around 350 and DUC counts were high.
However, as we’ve been talking about for the past several weeks, things have changed for the positive as far as the industry is concerned, and it’s going to get better according to presenters at the recent NAPE Global Business Conference in Houston. The current U.S. rig count is now at 613 and may be heading to 800 this year if OFS companies can fill a real labor shortage gap.
However, when it comes to valuations, assuming oilfield service companies will join the recovery has not always been true in the shale era. That said – this time may be different.
In this week’s post, we note the past and current performance of oilfield service companies and discuss the valuation trends for the industry.