Friday, November 8, 2013

Superior Energy: This Attractive Oilfield Services Firm Is Eyeing Growth Through International Expansion

The following is a small-cap-insight column, on a company with a market cap of $5 billion, published by Seeking Alpha. 

Superior Energy Services (NYSE:SPN) is eyeing a turnaround through significant growth at the Gulf of Mexico and international markets. The stock is a buy and presents a 33% upside from current price levels. 

Superior Energy Services (SPN) is a Houston based oilfield services firm which provides oilfield services and equipment to both onshore and offshore operators. The company initially started out as an oilfield products manufacturing firm but then expanded its operations into the services market. The company has been operating in the United States for more than two decades and has significant operations across all the primary basins. During this period, Superior achieved considerable growth and went from making annual revenues of $12 million in its early days to its present TTM revenues of $4.65 billion.

Recent Growth and Future Estimates

Since 2012, Superior increased its focus on the land markets and is using its strong cash-flow generation abilities to expand in the international markets. This was evident in its last year's sale of its liftboat fleet to SEACOR Marine and the merger with Complete Production Services in which Superior purchased Complete Production through a $2.7 billion cash and stock deal which significantly increased Superior's exposure to North America's land market. Then earlier this year, in March 2013, Superior purchased 100% equity interest in a South American firm which provides cementing services to energy companies of Colombia, thereby expanding its operations in the continent. For this acquisition, Superior has paid $20.4 million and will make an additional payment of $3.7 million.

After the Complete Production acquisition, Superior started posting significant increase in revenues as the company went from making average quarterly revenues of less than $500 million in 2011 to more than … read full article at Seeking Alpha