An Overview of the Philadelphia Oil Service Sector Index

The Philadelphia oil service index is made up of the stocks of the fifteen largest companies that service the oil and natural gas industry. The symbol is OSX. These companies help drill for oil and gas, and also service marine and land-based oil and natural gas wells.

Well-known companies in the Philadelphia oil service sector index include:

Halliburton (HAL) provides products and services to energy companies. It operates in two divisions, one that helps find and produce new energy, and one that mostly helps maintain production. One of Halliburton’s growing businesses is hydraulic fracturing, which increases oil production in certain kinds of wells. Halliburton was founded in 1919, and is working on projects in about 70 countries.

Nabors Industries (NBR) is a worldwide land drilling contractor, which also provides support and maintenance in the U.S. and Canada. It manufactures, sells, and leases a variety of rigs and other essential equipment. Nabors Industries was founded in 1968, and is based in Bermuda.

Transocean Ltd. (RIG) In November 2009, RIG was the largest holding in the OIH. The company provides offshore contract drilling services worldwide. It owns many offshore drilling units, used in getting oil out of deep waters. Based in Switzerland, Transocean was founded in 1953.

National Oilwell Varco (NOV) operates in three segments: Rig Technology, which provides offshore and onshore drilling equipment; Petroleum Services and Supplies, which makes and sells consumable equipment drillers need, like pipes and pumps; and Distribution Services, which sells maintenance supplies and spare parts. NOV has been in business since 1862, and is based in Houston.

Schlumberger (SLB) operates both in the U.S. and internationally. Its two segments are Oilfield services and WesternGeco. Oilfield Services offers technology, management and consulting to oil and gas producers. WesternGeco provides mapping, surveying, and seismic services to exploration and development companies, to help find energy. Schlumberger was founded in 1927 and has headquarters in Houston, with additional offices in The Hague, and Paris.

Weatherford International (WFT) provides equipment and services for the production of oil and gas. It provides artificial lift systems, manufactures and sells equipment, and provides chemical technology and services. It was founded in 1972, and is based in Switzerland.

Tidewater (TDW) operates a fleet of offshore service vessels that provide support and services to oil drilling. It also operates two shipyards in Houma Louisiana, which construct, repair, and refurbish vessels. The company was founded in 1956. Its worldwide operations are headquartered in New Orleans.

Smith International (SII) provides a wide range of products and services to the oil and natural gas industry as well as to the power generation, mining, and petrochemical industries in the United States and internationally. The company has three divisions and a network of sales offices and service centers worldwide. The company was founded in 1937, and is headquartered in Houston.

Rowan (RDC) provides contract-drilling services. It makes equipment for the timber, mining and drilling companies. It also owns a fleet of land drilling rigs and jack-up rigs, mobile offshore oil platforms that can be moved into place. The company has been in business since 1923 and is headquartered in Houston.

Oceaneering International (OII) provides products and services to the offshore oil and gas industry. It also offers equipment and engineering services to NASA, other government agencies, defense contractors, and theme parks, as well as insurance companies and salvage associations that need services in deep water. The company, founded in 1965, has operations worldwide but is headquartered in Houston.

Noble (NE) provides contract drill services, with a substantial fleet of offshore units. It also provides consulting, engineering, and project management. Founded in 1921, Noble does international business from headquarters in Sugar Land Texas.

Global Industries LTd.(GLBL) provides subsea and construction services, from shallow water to 10,000 feet. Its Offshore Construction Services unit provides construction assistance, while the Subsea Services division provides marine support, divers, and diverless assistance in the gulf of Mexico and internationally. The company was founded in 1973. Its headquarters are in Carlyss, Louisiana.

Cameron International Corporation (CAM) handles flow equipment services, products and systems for oil and gas producers and processors around the world. It helps contain, move, measure, and purify oil and gas. The company was founded in 1994 and has headquarters in Houston.

BJ Services Company (BJS) provides pressure pumping services for the oil and gas industry. The company was founded in 1872 and is headquartered in Houston. The company is being purchased by Baker Hughes.

Baker Hughes Inc. (BHI) helps find and produce oil and gas. Baker Hughes is purchasing BJS for about 5.5 billion in cash and stock. The company was founded in 1972 and is headquartered in Houston Texas.

Some of the ETFs, exchange traded funds, that specialize in stocks in this sector include OIH, PXJ, and XES. OIH is the symbol for the Oil Services HOLDRS ETF, which is managed to try to move with the price of oil. PXJ is the symbol for the Power Shares Dynamic Oil and Gas Services ETF. The SPDR S& P Oil and Gas Equipment and Services ETF is XES; it is a passive fund. None of these sector ETFs is diversified.

Oil service stocks are said to be leveraged to the price of oil. When oil prices go up a bit, these volatile stocks are expected to rise, because with oil prices rising, oil and gas companies are more likely to want their services, and their profits are considered likely to soar. On the other hand, if oil prices fall, the prices of the stocks of oil service companies are believed likely to suffer more than the stock prices of their customers will.