BJ Services Company (BJS)

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BJ Services Director Buys Big Stock Block
By ALEXANDER EULE

Tables: Buyers | Sellers

A DIRECTOR AT BJ Services looks pumped up about the oil-services company's stock.

Board member John Huff bought $819,000 worth of BJ Services stock last Wednesday. That's the largest insider purchase at the company in over five years and only the third such buy during that time frame, according to InsiderScore.com.

Huff acquired 37,545 shares in the transaction, at an average per-share price of $21.82, according to a Securities and Exchange Commission filing on Friday. Earlier in the week, Huff also spent $470,000 to exercise options. That transaction netted him 37,138 new shares at an average strike price of $12.65. Huff now holds 148,000 shares of BJ Services. About 22% of that stake is in exercisable options, with another 11% in the form of so-called "phantom stock." The total is far less than 1% of BJ Services' outstanding shares.

BJ Services did not return a call seeking comment on the transaction.

Huff is the chairman and former chief executive officer of fellow oil-services firm Oceaneering.

BJ Services generates the majority of its revenue from pressure-pumping services, which are used in completing, maintaining and enhancing oil and gas wells.

Given BJ Services' stock performance of late, Huff's purchase is an unusually bullish call on the company. Shares of BJ Services have fallen 20% over the last 12 months compared with a 21% gain for the DJ U.S. Oil and Equipment Services Index.

The company has been hurt largely by oversupply of pressure-pumping services in the U.S. and Canada.

More recently, the industry at large has been pressured by falling oil prices and adverse weather. (See Weekday Trader, "Schlumberger's Fire Sale," Feb. 7, 2008)

In late January, BJ Services' fiscal first-quarter earnings came in just below Wall Street estimates.

Along with the earnings news, BJ Services Chairman and Chief Executive Bill Stewart said, "During the second quarter of fiscal 2008, we expect relatively flat drilling activity with continued pricing pressures in the U.S. market."

A day later, however, J.P. Morgan analyst Kevin Pollard upgraded shares to Neutral from Underweight, writing that "challenges are adequately reflected in our estimates and 2008 will likely mark the earnings bottom."

Pollard was not overly enthusiastic but suggested a turnaround could be in the making. "We still see limited near-term upside, but we believe the stock is now at a point where patient value investors can begin building positions without taking unreasonable downside risk."

BJ Services shares jumped 6.6%, or $1.45, Monday to close at $23.52.