Forum Post: GOLDMAN: 'Buy US Shale Exposure'

Goldman Sachs is bullish on the shale niche of the energy industry. In a new note title 'Johnny Come Home' Buy Shale Enablers, Goldman analysts slap an 'Attractive' rating on the oil services sector. Owing to the shale revolution, US land rig demand has just entered the second phase of a multi-year pick-up. This is a “higher quality, lower volatility” phase driven by drilling in oil bearing shales, entry of deep pocketed oil-majors/E&P companies, and requirement for large scale developments. By 2014-2015, US land rig demand should get another boost, as gas prices pick up and gas rig count, down 46% from peak, recovers Fracturing, the method of extracting fossil fuels from shale, has drawn much public criticism due to risks of groundwater contamination. Nevertheless, the analysts argue that the economics of fracking are very favorable in the near-term. Fracturing is the key enabler in shale exploitation and should grow 18% in 2012, while remaining under-supplied by 29% at year-end 2012. The analysts' top picks are Halliburton and Helmerich & Payne, which were both placed on Goldman's exclusive Americas Conviction Buy List today. They also have buy ratings on Baker Hughes, Patterson-UTI Energy, and Weatherford International. However, they have sell ratings on Diamond Offshore Drilling and Transocean due to "concerns about asset age and the potential for negative earnings revisions." SEE ALSO: Everything You Need To Know About The Shale Gas Revolution >

http://www.businessinsider.com/goldman-buy-us-shale-exposure-2011-12

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