Surprising Results From Wunderlich Securities E&P And OFS Survey

Wunderlich Securities conducted its inaugural quarterly oilfield services (

) and exploration & production (E&P) survey. Numerous investors/company managements were asked about expectations for 4Q10/2011 macro data, commodity prices, investing styles, and valuations. “The results were surprising; the groups expect more activity next year despite macro data and commodity prices moving little,” Wunderlich Securities writes. “Both groups believe the economy remains relatively tepid through 2011 as well as commodity prices remaining around current levels.” But, Wunderlich Securities says, both groups believe M&A activity should continue to improve and investors expect most E&P/OFS stocks to remain cheap. “The groups were differentiated on what OFS costs should do the remainder of the year, but both believe we should continue to see OFS costs increase smartly in 2011,” Wunderlich Securities writes. “Bottom line, results indicate to us that investors are likely to continue buying OFS/E&P stocks and that OFS/E&P companies are likely to continue increasing spending.”