Oil companies are finding it increasingly difficult to extract gas from traditional deposits and are now being forced to look to alternative sources and methods of extraction. And Core Laboratories (CLB) is a Netherlands-based company that provides the technology that oil producers use to develop their oil and gas properties—including reservoir description, production enhancement and reservoir management services. Here’s a quick rundown of those services:
- The company’s reservoir description services comprise the characterization of petroleum reservoir rock, fluid and gas samples; and provision of analytical and field services to characterize properties of crude oil and petroleum products.
- Its production enhancement products and services relate to reservoir well completions, perforations, stimulations and production, as well as include integrated services to evaluate the effectiveness of well completions and to develop solutions to increase the effectiveness of enhanced oil recovery projects.
- Core Laboratories’ reservoir management services consist of the combination and integration of information from reservoir description and production enhancement services to increase production and enhance recovery of oil and gas from clients’ reservoirs.
In the third quarter, Core Laboratories’ sales rose 11% to $273.2 million compared with the same quarter a year ago. During the same period, the company’s earnings rose 15% to $62.3 million or $1.36 per share. This topped the $1.34 consensus earnings estimate by 2%. The company also issued a strong fourth-quarter sales guidance to $278 million to $271 million, which was very well received.
Judging from these results, it’s clear that CLB is a solid play on the energy market. And given that this company’s services are in such demand, I expect this momentum to continue. So in the wake of this strong earnings announcement, I recommend you add shares of this Moderately Aggressive stock below $213.