EPR Feb 2011 Roadshow
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Transcript of EPR Feb 2011 Roadshow
Doug SheridanManaging Director
EnergyPoint Research, Inc.
Customer Satisfactionin the Oil & Gas Industry
February 2011
Disclaimer
The information contained in this presentation, whether satisfaction ratings, stock quotes, charts, comments or any other statement or statements regarding market or other financial information, is obtained from sources which EnergyPoint Research and our suppliers believe to be reliable; however, EnergyPoint Research does not warrant or guarantee the timeliness or accuracy of this information. Nothing contained in this presentation should be interpreted to state or imply that past results are an indication of future performance. Neither EnergyPoint Research nor its information providers shall be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness of, or for any delay or interruption in the transmission thereof to the user. THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION INCLUDED IN THIS E-MAIL OR ON ENERGYPOINT RESEARCH’S WEBSITE. THIS PRESENATATION IS IN NO WAY A SOLICITATION OR OFFER TO SELL SECURITIES OR INVESTMENT ADVISORY SERVICES. RECIPIENTS AND READERS ARE ADVISED THAT ENERGYPOINT RESEARCH IS A SPECIALIST IN THE FIELD OF CUSTOMER SATISFACTION IN THE OIL AND GAS INDUSTRY AND THAT ENERGYPOINT RESEARCH IS NOT A SECURITIES ANALYST.
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EnergyPoint Research
Founded in 2003 Independently measure the oil and gas
industry’s satisfaction with product and service suppliers
Plays the same role in the oil and gas industry as:• J.D. Power & Associates plays in the automotive and other
consumer industries
• Consumer Reports plays in the consumer products and services sectors
Our Focus
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Rewards for Investors24-Month Returns vs. Satisfaction Rank
+12.1%
Out Performance *
Oilfield Products & Services
+33.4%
Out Performance *
* Relative to peer-group average.
BottomHalf
TopHalf
BottomQuartile
TopQuartile
Pg 4
Top-rated Suppliers
Onshore Drilling: Helmerich & Payne
Offshore Drilling: Noble Ensco
Oilfield Services: M-I Swaco
Oilfield Products: Derrick Equipment
Smith International
Most Recent Surveys
Pg 5
Other Standouts
Currently Rated “Four Stars” Carbo Ceramics – Ceramic Proppants
Derrick Equipment – Shale Shakers
Helmerich & Payne – U.S. Land Drilling
Lufkin Industries – Artificial Lift Equipment
Smith International – Integrated Products
Sumitomo Pipe – Oilfield Tubulars
Dominated by specialty suppliers
Most Recent Surveys
Pg 6
Others to Watch
Showing Improvement Newpark Resources – Drilling Fluids
Oceaneering – ROVs & Other Subsea Equipment
Tetra Technologies – Products & Services
Potential for Improvement GE Oil & Gas – Wellhead, BOPs, risers, etc. *
* Potential challenger to companies like Aker Solutions, Cameron International, FMC Technologies and National Oilwell Varco
Good and/or Getting Better
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Other NotablesBased on EnergyPoint’s Four-star System
Services Products
Rating Trend Rating Trend
Baker Hughes 2.0 2.5
Cameron Int’l - - 2.5
FMC Technologies - - 1.5
Halliburton 2.5 3.0
National Oilwell Varco - - 1.0
Schlumberger 2.0 1.5
Transocean 1.5 - -
Weatherford Int’l 1.5 1.5
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Downward TrendRatings Lowest When Activity Highest
Commodity prices at or near recordhighs (some suppliers are still payinga price for how they treated andperformed for customers during thisperiod).
Customer satisfactionat or near lows
EP
R C
ust
om
er S
atis
fact
ion
In
dex
OS
X
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Most Segments DownOffshore Drillers Buck the Trend
92
94
96
98
100
102
104
106
Land Drillers Offshore Drillers Services Products
2010 2004/05
Without HP’s rating of 113, segment would look much worse
Term contracts provide for more stable and predictable operations
HAL’s ratings improvements not enough to offset other’s declines
Customers feel trapped and frustrated with big players like NOV and Aker
Pg 10
Ratings ComparisonsInside and Outside of the Industry
* Source: Most recent EnergyPoint and equivalent ACSI ratings.
10-pt Scale
All four industrysegments fall betweenthe US Postal Serviceand the IRS
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Industry ConsolidationOn Average, Not Good for Customer Sat
Rating Before the Deal Rating After
The Deal Transaction Purchaser Purchased
National Oilwell – Varco
1.0 1.0 1.0
Transocean – Global Santa Fe
3.0 1.5 1.5
GE – Vetco Gray n/a 2.0 1.0
GE – Hydril n/a 2.0 2.0
Precision – Grey Wolf 3.0 1.0 2.5
Baker – BJ Services 2.5 2.0 ?
Schlumberger – Smith
Ensco – Pride
2.0
3.5
4.0
3.0
?
?Pg 12
Is Bundling a Good Thing?Customer Ratings Raise Questions
# of Products / Services Used by Customer
EP
R C
ust
om
er S
atis
fact
ion
Ind
ex
But Statistically Significant Lower Ratings from Customers Using Larger Numbers of Products and Services from a Single Supplier Suggest Otherwise
Conventional Wisdom Says a Broader Set of Offerings Leads toHigher Customer Satisfaction Because of Greater Selection, One-Stop-Shopping Benefits, etc.
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Subsea Looks Underserved
Multiple Subsea ProductsSeen as Falling Short
BOP & Wellhead RatingsFavor Surface-based Applications
As Subsea RatingsLag Other Product Categories
Away from Land,Ratings Deteriorate
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Subsea ProductsBig Room for Improvement
L-T Industry-wideAverage
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Drivers of Customer Sat
Oilfield Services/Drilling Highly Important – Performance and reliability
Important – Job quality; service and professionalism
Oilfield Products Highly Important – Engineering and design
Important – Corporate capabilities; performance and reliability; and personnel
Note – Pricing is not a large driver of customer satisfaction, although
value (i.e., quality-for-price-paid) is.
Less About Price Than You’d Think
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Healthy & SafetyPositive Grades from Customers
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