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What happened

Today was a good day to be invested in oil and gas services companies as stocks across the industry are up double digits as of 11:45 a.m. EST after OPEC announced that it had agreed to a production cut of 1.2 million barrels per day. Here's a quick list of some of the oil services companies that have seen their stock prices move more than 10% as a result of the news:

Company% Price Change
Halliburton (NYSE:HAL) 11.1%
Weatherford International (NYSE:WFT) 14.6%
Superior Energy Services (NYSE:SPN) 15.4%
Helix Energy Solutions (NYSE:HLX)  14.3%
Newpark Resources (NYSE:NR) 11%

So what 

The most direct connection between the share-price jump and the movement in these stocks is that an OPEC cut should bring about higher prices for the commodity, which in turn should spur increased drilling activity and higher demand for the services these companies provide.

This is especially true for companies that have more exposure to North American shale. The quick development time for this kind of production suggests it will be the first part of the industry to see an uptick. This is why Halliburton, despite being a $45 billion company, and Newpark are up double digits. Of the three largest oil services providers out there, Halliburton has the most exposure to North American shale. And Newpark's drilling fluids and industrial protective mats are heavily connected to North American shale.

The other three companies don't have as much exposure to North American shale, but what they lack in North American exposure, they make up for in an absolute need for more business in general. Weatherford has been going through cut after cut of its workforce to reduce costs and start to generate cash from operations and pay down debt, but the declines in the market have kept it from achieving this goal. Similarly, Superior Energy Services and Helix Energy Solutions have been posting heavy losses as they try to rightsize their businesses. Their stocks have been in the doldrums for a while, so today's news comes as a well-needed sign that the worst of this energy downturn may finally be over.

Now what

Before investors jump into any of these stocks, they need to keep in mind that each plays a different part in the life cycle of oil and gas development. The companies more tied to shale, such as Halliburton and Newpark, will likely see results much sooner than the likes of Helix, which is more connected to offshore work. In any case, today's news -- assuming that the production cut lasts for a while -- is a good thing for the industry as a whole, indicating that we should finally start to see some improvements on the income side of things. 

Tyler Crowe has no position in any stocks mentioned. You can follow him at Fool.com or on Twitter @TylerCroweFool.

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