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Herculean Expectations for These Energy Companies

By Taylor Muckerman and Joel South - Apr 25, 2013 at 6:09AM

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Following peers that release expectation-beating results during reporting season is never easy. The bar is set high for these two early in 2013.

Energy companies are finally starting to report earnings and, for the most part, meeting or beating expectations has been the standard for this group in 2013. Depending on how you look at it, seeing one of your peers provide great results and even more stellar expectations can be a good thing or a bad thing. Regardless of your perspective, it undoubtedly adds pressure.

Gulf of Mexico delivering boatloads of profit
Already, several companies have spoken glowingly about activity levels in the Gulf of Mexico. Not just drillers like Noble Corp (NEBLQ) but also equipment and service companies like Halliburton (HAL 0.17%) and Schlumberger (SLB -0.68%). What we are seeing here is a steady increase in both dayrates and utilization rates, which are both very positive signs for drillship operators.

On an island by itself
Within the offshore market, Hercules Offshore (HERO.DL) has isolated itself as a jack-up rig specialist. Even more specialized is the fact that 29 of its 38 rigs are currently drilling for fossil fuels in the Gulf Coast region. While many companies left the area after the Macondo incident, Hero decided to stick around and many expect this diligence to payoff. Tomorrow's release will certainly go a long way toward proving this optimistic group right or wrong.

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Stocks Mentioned

Hercules Offshore, Inc. Stock Quote
Hercules Offshore, Inc.
HERO.DL
Valaris plc Stock Quote
Valaris plc
VAL
Schlumberger Limited Stock Quote
Schlumberger Limited
SLB
$40.85 (-0.68%) $0.28
Halliburton Company Stock Quote
Halliburton Company
HAL
$36.06 (0.17%) $0.06
Noble Corporation plc Stock Quote
Noble Corporation plc
NEBLQ

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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