What Does GE's Recent Purchase Say About the Oil Industry?

On the surface, General Electric's (NYSE: GE  )  announcement that it will buy Lufkin Industries  (UNKNOWN: LUFK.DL  ) just appears to be a manufacturing giant picking up an oilfield services manufacturing specialist. If you dig deeper, though, you find that this could be a big signal of what is to come in North American oil and gas production. Lufkin's specialty is building artificial lift equipment for oil and gas wells, a service normally reserved for mature wells that need a little extra help bringing resources to the surface. 

With so much drilling happening in the U.S. over the past few years, there may be a big boom for this type of particular equipment in the next couple of years. With this purchase, not only is GE locking up a larger market share in this particular industry, but the high price it paid, it shows how valuable this market could be. in this video, Fool.com contributor Tyler Crowe discusses how the deal went down, and he also gives some possible investment ideas that follow this particular trend.

For GE, the recent financial crisis struck a blow, but management took advantage of the market's dip to make strategic bets in energy. If you're a GE investor, you need to understand how these bets could drive this company to become the world's infrastructure leader. At the same time, you need to be aware of the threats to GE's portfolio. To help, we're offering comprehensive coverage for investors in a premium report on General Electric, in which our industrials analyst breaks down GE's multiple businesses. You'll find reasons to buy or sell GE today. To get started, click here now.


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  • Report this Comment On April 14, 2013, at 11:58 AM, watchhound wrote:

    Remember that GE was a big contributor to the Obama campaign. Also ... That when the democrats controlled both houses of congress , gave GE the go ahead to make those stupid light bulbs. Looks like big oil is a democrat thing now.

  • Report this Comment On April 14, 2013, at 12:12 PM, Schave0503 wrote:

    GE has bought out a few oil & gas service companies.... Wireline for sure. Doesn't surprise me one bit

  • Report this Comment On April 14, 2013, at 12:32 PM, fwe43 wrote:

    Hey watchhound, I thought Obama and the Democrats were big mean "socialists" that hated corporate America. What are they doing hanging around with and giving favors to one of the world's largest corporations? LOL You guys need to pick a narrative and stick to it. Or maybe you've finally figured out the problem. That both parties are in bed with corporate america and we're essentially a plutocracy.

  • Report this Comment On April 14, 2013, at 2:37 PM, LadyMantle wrote:

    Acquisitions are very risky business these days and you had better be prepared to turn that acquisition about face and use the equipment for a purpose other than reviving matured wells. Have seen many companies acquire bankrupt companies and then start going under themselves. The weight of bankruptcy has a way of taking the wind of most sales or sails, either way you want to look at it. If I were GE, I would start thinking outside the box and start thinking solar and wind which no doubt they are doing. Tremendous strides have been made in solar and wind.

  • Report this Comment On April 14, 2013, at 3:38 PM, cdkeli wrote:

    The CEO and top-management minions at GE suffer from the same arrogant acquisition cretinism that affects so many other CEO's, namely they share the same arrogant "I know know what's best" attitude (despite clear evidence to the contrary) that invariably results in the meaningless destruction of marginal companies and waste of both intellectual capital and talent but guarantees their own obscene bonus requirements from contracts the boards had them sign to encourage their boys club attitude of "scratch my back,,,"

  • Report this Comment On April 14, 2013, at 4:49 PM, fingerlakes54 wrote:

    GE--could be positioning itself quite well. Though a little unusual for a GE purchase--it might be trying to get a good mix on future energy demand. Covering both oil production in the USA and the future source of wind and solar cell power it seems to be a good choice. I hope GE will be responsible with it's assets in the future--and not just become another energy monster to disrupt the American Economy. GE stockholders should be alright with this purchase and may contribute to a company with multiple products in the energy business.

  • Report this Comment On April 14, 2013, at 6:29 PM, quasimodo007 wrote:

    it means that that theGOP Congress mafia style Privilege Crooks of wall street can Pollute the Drinking water and Land like the evil Polluters Koch brothers and pay just small pocket change FIND

  • Report this Comment On April 14, 2013, at 11:21 PM, Hayesml47 wrote:

    GE is one of the prime members of the Corporate America group(once called the Military Industrial Complex). Until our government, or what is left of it, finally starts using the anti-monopoly and anti-trust laws to break these gigantic corporations back down to a reasonable level Our entire country will be in dire jeopardy and in emminent danger of a total take-over by CA!

  • Report this Comment On April 16, 2013, at 4:01 AM, jdoig wrote:

    I don't get it. Lufkin is a distributor and manufacturer of commodity oil field stuff, nothig too special that I've seen. Unless GE has soome majic toad in their pocket I can't see this going anywhere. Almost everything Lufking does can be brought in from Mexico or China.

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