Essential Energy Services Ltd. (ESN.TO)

Energy Services. Biggest in coil tubing. They control their supply chain through contracts. Their tools business is expanding into the southern US as well. Good balance sheet. 4% dividend yield was recently boosted.

(Market Call Minute.) One of the best oil/gas service companies.

Has held it. Ranks in the middle of his process because of valuation being high. Wait for catalysts.

Oil service company that can go back into gas if they want to. Expanded into Northern US and Columbia. They found out what the political risks were and decided to move out of Columbia. They own the coil tubing industry. Could be a player if LNG projects really take off. The outlook is still pretty good.

Energy services sector is the cheapest in the TSX. Beauty of this one, along with the others, is that most of them are paying dividends. This one pays 4.5% plus. This company is the largest in the coiled tubing in Western Canada. Have also done a great job in acquisitions and integrating. The company is a sitting duck to be taken over in the next 12-18 months. Regardless of where oil is, services still have to be maintained so companies like this will all do well in this environment.

If you have a longer-term view, you could possibly see a double in the energy services’ space, because a lot of energy services stock has gone through a very tough 3-4 years. A lot have paid down debt and are close to completion in building their fleets. Generating free cash flow as well as very healthy margins, ranging from 20% to 30%. As a sector they are all very attractively valued as they hardly have any debt on their books. This is trading at about 4X cash flow and has a 4.43% dividend yield. Also, 2014 is going to be a very robust drilling year.

Had a wet spring break up, missed expectations so the stock went down a little. What he likes is that they have a lot of deep coiled tubes servicers in their fleet. These are good for areas like Northeastern BC which has a lot of companies coming in to do drilling for liquefied natural gas. Expect they will be in high demand going forward. Should post pretty decent results for the rest of the year. Trading below 8X earnings. 4% yield.

Had a great run. They do oil and gas servicing. They have a type of rig that are always fully utilized. This is a crown jewel in this space and the stock is cheap at these levels. He is a little cautious at this valuation. It might be worth taking some profits and waiting for a pullback to get back in.

Their current rigs are very suited for SAGD heavy oil drilling as well as some of the deep basin drilling. There is a lot of activity in this space right now so she expects utilization as well as day rates to increase over the next year. Trades at about 5X cash flow. Very clean balance sheet. Could be a takeout candidate. Dividend yield of about 4%.

In the completion of horizontal wells which is where the industry is these days. Very comfortable dividend of about 4%. Hidden jewel is perhaps their rental and tool business that is used in fracturing of well bores, which seems to offer a cheaper alternative to the ball technologies that exist today. Will have over $80 million in cash flow. Dividend costs about $13 million a year. Have less than half a year’s debt on the balance sheet. Have the biggest coil tubing fleet as well. Room to grow and room to increase the dividend.

Services business is a derivative of the energy business. He is skeptical of any services name right now. Avoid it. They are just too volatile. They only bring them in when times are good.

An oil service company, expanded outside of Alberta. Managment is quite good. Have seventh biggest fleet in the industry. Payout is only 15%. Tried drilling in the Columnian market but cut their losses very quickly there.

Has owned, purchased more in the last 3 months. She likes this story. Recommends to keep holding if you own if it is a small part of your portfolio.

Have done an admirable job in very difficult conditions. Market cap of about $275 million and are very liquid. Nice dividend of about 4.5%. Have sold off some hybrid rigs and are putting some of the Colombian assets up for sale in order to get back to what they really do best, deep coiled rigs. They are listening carefully to their customers which need extraordinarily specialized equipment to get into very deep complicated wells. (Caution. - Highly specialized and are just into deep coiled rigs in Alberta.)

Mostly service rigs, etc. which is more stable than a pure drilling operation. Has been a tough environment for the entire energy services sector in Western Canada. Well-run company. This is a sector that he is currently staying away from. 4.7% yield.