Nabors Industries Ltd. (NBR), Halliburton Company (HAL): Oil Services Have Caught the Pressure-Pumping Plague

And the cherry on top: It appears that increasing the total amount of fracs may not be the solution we thought it could be. I’ll leave it to Core Laboratories N.V. (NYSE:CLB) CEO David Demshur to describe it best: “[Our] evidence now shows that 80% of these stages actually flow little or no hydrocarbons into the well bore.”

If you are scoring at home, that’s an oversupplied market that may be doing significantly more work than necessary, which could see a sharp decline in activity for the rest of the year.

Gulp.

Go someplace warm — doctor’s orders
If there is one way out of this less than desirable market, it’s that the thirst for American technology and know-how in hydraulic fracturing overseas is growing everyday. Nabors Industries Ltd. (NYSE:NBR) is already in the process of shipping some of its drilling rigs to South America and is waiting on a big tender from Saudi Arabia, and Halliburton Company (NYSE:HAL) and Schlumberger Limited. (NYSE:SLB) are setting up subsidiaries in China to supply specialty hydraulic fracturing fluids. These moves have a two-fold benefit. It utilizes what would be non-working assets in the North American market, and it helps to clear the glut of equipment in the U.S. Perhaps moving some of its frac crews to these markets would help to clear the oversupply of pressure-pumping assets in the U.S. as well.

What a Fool believes
Services companies are getting better at extracting oil and gas, but with those improvements will come fits and starts as the industry gets a better handle on how to drill these new(er) shale resources. It was only last year when Halliburton Company (NYSE:HAL) took an earnings hit when it overpaid for guar gum of all things. So, investors shouldn’t be too surprised as the industry goes through these rather short undulating cycles.

The article Oil Services Have Caught the Pressure-Pumping Plague originally appeared on Fool.com is written by Tyler Crowe.

Fool contributor Tyler Crowe has no position in any stocks mentioned. You can follow him at Fool.com under the handle TMFDirtyBird, on Google +, or on Twitter, @TylerCroweFool.The Motley Fool recommends Halliburton.

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