Do you like playing with fire? Well then, the volatility that energy provides might be just right for you. Let’s take a look at the energy sector to investigate its trials – and the companies who will overcome them. Here are three businesses worth your attention.
Shareholder activists
Sometimes energy companies find themselves in the midst of leadership shake-ups. Either shareholders call for new boards or top managers change course. Or leave altogether.
For example, Chesapeake Energy Corporation (NYSE:CHK) revamped its strategy to cater to shareholders’ (Carl Icahn’s) desires. Last summer saw Chesapeake Energy Corporation (NYSE:CHK) roll the dice on new leadership. Shareholders pushed out two members of the eight person board of directors.
Through the shakeup, shareholders communicated a new message: as costs increase for the industry, they would like management to cut back on spending and increase liquidity. The changes didn’t exactly fit the style of long-time CEO Aubrey McClendon. Hence CEO Robert Lawler’s installment.
Discovering and producing fuel
Saddled with the high capital intensive nature of the industry, companies must avoid wasting capital on inefficient and unsuccessful efforts. Otherwise millions (or billions) of dollars could evaporate. But through the right combination of technology, talent, and location, some firms set themselves apart.
Deep sea oil discovery and drilling is no easy task. But Chevron Corporation (NYSE:CVX) finds a way to make it work. In March, Chevron Corporation (NYSE:CVX) announced a large discovery of oil in the Gulf of Mexico, it also completed three wells in the Gulf of Mexico this year.
Its success comes from its partnership with Halliburton Company (NYSE:HAL). Chevron Corporation (NYSE:CVX) and Halliburton Company (NYSE:HAL) came together to develop a special tool called the Enhanced Single-Trip Multizone FracPac System (ESTMZ). The tool aids in drilling and gives Chevron Corporation (NYSE:CVX) a leg up. ESTMZ allows drillers to isolate each drilling zone. Then pack and frack these zones efficiently using the best rated proppant, which keeps fractures open, and fracturing fluid in the drilling industry.
