Energy Services Sector Hotter than a Jalepeno in a Heatwave
LXES — Lexington Energy Services, Inc.
Stock Guru LXES Profile
There’s an old saw that says if you really want to strike gold, don’t invest in the miners — buy the pick and shovel makers instead. Apply the analogy to energy stocks and you come up with plenty of opportunity in oil-field service and equipment companies. These are the companies that provide drilling rigs, pressure valves, and other sundry equipment and services to energy exploration and production companies — the companies who are taking the risks on the dry hole.
Jim Cramer reiterated his passion for the energy services sector again on Tuesday on “Mad Money.” And its true, the energy service sector has been hotter than a jalepeno in a heatwave.
First Energy Agrees!
In February First Energy noted: “History has suggested that investors look forward and, as such, service stocks look compelling at these levels. We continue to be bullish on the sector with a potential gain of 38% over the next 12 months.”
“For the year, we are expecting 20,900 wells to be drilled, 2,000 fewer than the 22,979 wells drilled in 2006. While the absolute decline is not that steep, it is important to note that there may be more shallow wells drilled in 2007 than in 2006,” the report stated. “We expect utilization to decline from the 55.1% achieved in 2006 to 44.3% as the high number of rig additions added in 2006 enters the market in 2007.” FirstEnergy expects the Western Canada Sedimentary Basin to exit 2007 with 851 rigs or 13 more rigs than at the end of 2006.
However, it expects that the number of wells drilled in 2008 will improve to 25,300 with the 16,991 gas and 6,285 oil wells completed.
Stay tuned as Stock Guru examines the complimentary energy service sector Lexington has developed in the booming Oil Sands of Alberta, Canada.
Source: Lexington Energy Services Inc., CNBC, and Morgan Stanley
CONTACT: Lexington Energy Services Inc., Mark Procknow, Investor Relations, Calgary, 1-877-279-4550
About Lexington Energy Services Inc.: Lexington Energy Services Inc. manufactures and leases innovatively designed oilfield service equipment. Through their wholly owned subsidiary, Lexcore Services Inc., we also provide a range of drilling services to meet the growing needs of the oil and gas industry, including Alberta’s oil sands.
Forward-Looking Statements: Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements. Actual results may differ materially from those described in forward-looking statements and are subject to risks and uncertainties. See Lexington’s filings with the Securities and Exchange Commission which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.
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