As can be readily seen with the ongoing BP capping process, there are several aspects of the oil and gas exploration marketplace that are fairly specific. There are just a few companies working in these specialty fields and even fewer that have the reputation required to win a sizable portion of outstanding contracts. For the investor that can find one of these specialty companies, there is profit to be made. Each of the companies is subject to the same whims of the marketplace that any company must deal with, but since competition is somewhat less, profit will flow.
Geokinetics Inc., a company specializing in the generation and analysis of two and three dimensional subsurface images, works to assess subsurface conditions for the exploration of natural gas and oil. The company is international in scope and offers its services for both on and off-shore oil and natural gas exploration projects.
Although the oil sector is currently experiencing a slight slowdown in pricing and public relations, Geokinetics is moving forward in fine fashion. It has recently won $80 million in new contracts spanning Latin America, Asia and the Marcellus shale formation within the United States. In a general sense, the company is finding that its aggressive bidding practices are being accepted around the world causing a climate of cautious optimism going forward. It also indicates that there are several larger contracts out to bid that the company expects to hear about in the near-term future. Perhaps one of the more advantageous aspects that the company has to offer is its ability to process the data that it collects in the field. Not only can it send teams to the most remote corners of the globe quickly, but also rapidly assess the data through current testing and library queries. In this regard, Geokinetics has recently purchased two data processing divisions from Petroleum Geo-Services to increase its analytical abilities.
The fourth quarter was not kind to the company as geopolitical and safety concerns drove downtime higher. India, Egypt and Trinidad projects contributed significantly in this respect while safety in Angola also caused delays and additional downtime. Several administrative issues, including severance and floating rate notes, also contributed to the decline. The company, however, does seem to be hitting its stride within the industry as shallow and onshore exploration and analysis pick up pace in a dwindling supply based marketplace. In this rather specific field of work, Geokinetics Inc. looks to be well positioned with new contracts poised to exceed expectation.
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