Many oil and natural gas service companies called the fourth quarter of 2012 a trough in the North American market. By all accounts so far during this reporting period, that appears to be especially prescient. International heavyweights Halliburton (HAL 0.62%) and Schlumberger (SLB +0.67%) both witnessed signs that a second half turnaround us likely upon them and the industry as a whole.
What does that mean to Warren Buffett?
Well, a lot, really. For the last couple of quarters, Buffett has been adding stock in National Oilwell Varco (NOV +0.85%) to his portfolio and for what appears to be good reason. The company is modestly priced compared to peers and has its hand in both on-land and offshore drilling markets. Replacing parts on rigs and upgrading global fleets is Varco's business, and there are no shortage of customers.
With a great management team in place, tack-on acquisitions have created a full-service company that counts the majority of the drilling world as customers. If the conference call on Friday isn't full of positive news, I would be highly skeptical as to why after following the activity during the past week.
