I'm not exactly in 'tourist' central now so i don't have nearly the exposure to 'insight' that i did 2 yrs ago so put big error bars on my comments.
My guess is that the damage is done but i don't see the growth returning to what it's been over past 5 yrs. A bunch of service providers took hits when CLB took its 1st dive but the magnitudes were smaller and most of them have recovered while CLB hasnt. I suspect this is largely because of CLB's higher level of specialization, the greater number of competitors, constriction in exploration expenses by the big E&P companies over most of the past 5 yrs, and more exploration pulling back to the US.
When CLB took its 1st big hit a few months ago, WFT took a big jump. I would not be surprised if WFT took a good chunk of lab services that once went to CLB. That's speculation and i know CLB claimed that this wasnt the case (sort of) but a good chunk of WFT's business is lab analysis so I would pick them as CLB's most direct competitor of the big service companies. Conversely, when I googled core analysis last night SLB showed up above CLB. I know the person that runs SLB's lab services business and he is a very aggressive guy so I'm sure he spends a lot of time trying to take CLB's business but I'm also confident that he's not going to sacrifice profit margins in the process.
I don't know what fraction of CLB's business is due to core analysis versus other services but I can list things in addition to those i mentioned above that will affect the core analysis business. 1. the increase in relative number of horizontal wells. 2.'true' shales are not amenable to coring or core analysis so information is sought by other means. 3. related to #2, E&P companies may be using new logging tools to get that information (this was something explicitly referred to in today/yesterday's SLB investor conference). 4. while logging can be expensive so is coring; processing and interpretation of log data is faster and time is crucial when talking about multi-well pads.
the good news for CLB is that even with the recent whomping, their performance over the past 5 yrs dwarfs the other big service companies.
In the oil patch everyone does well in a thriving economy and that is the problem now. Over the next 2-3 yrs I think big oil is going to replace reserves thru acquisition rather than the drill bit and I suspect that might hurt CLB over that time frame. On the flipside real reserve replacement will inevitably have to occur, oil prices will rise, and then everyone will be happy (except for those folks who think windmills are efficient).
AI
