Superior Energy (NYSE:SPN) has successfully moved away from its roots as an oil services company leveraged to activity in the Gulf of Mexico, and is now diversified geographically into the United States onshore as well as internationally. The company offers a wide range of services used during all phases of a well.
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Superior Energy reported that 45% of its total revenue in the 12 months ending in September originated from the Gulf of Mexico. Domestic land and international accounted for 28% and 27%, respectively. Superior Energy had approximately 95% of its revenue from the Gulf of Mexico, prior to 2003. The company has a goal of having approximately one third of its business from each of these three areas.
Well Life Cycle
Superior Energy provides oil services across the entire life of a well, from the planning stages through drilling and completion. The company also offers plugging and abandonment services at the end of a well's productive life.
Superior Energy's International Segment
Superior Energy had only $56.7 million in international revenue in 2003, and has grown that by a 34% compound annual growth rate to $323.2 million in 2009. In the 12 months ending in September, the company reported international revenues of $426 million.
Superior Energy is looking for more growth in the international segment and is targeting Brazil and Australia for some of that growth.
Other oil service companies have a much higher percentage of revenues outside North America. Weatherford International (NYSE:WFT) reported that 60% of its $7.3 billion in revenues in the first nine months of 2010 were not from North American operations.
Superior Energy has also made acquisitions of selected oil service product lines that it finds attractive. The company purchased the Gulf of Mexico stimulation and sand control business of Baker Hughes (NYSE:BHI) for $55 million in July 2010.
Baker Hughes was required to divest these assets as a condition of the government approving its merger with BJ Services.
There have been other acquisitions in the oil services sector over the last few months. In December 2010, Basic Energy Services (NYSE:BAS) announced the purchase of Platinum Pressure Services, Inc. for $35 million. The company provides well servicing and other oil and gas related services in the Marcellus Shale.
Superior Energy has transitioned over the last few years to a geographically diversified oil services company that is positioned to offer products and services all through the life cycle of a well. (Before jumping into this hot sector, learn how these companies make their money. See Oil And Gas Industry Primer.)
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