arge exploration finds, England is seen as a politically friendly nation with the rule of law. That’s a big plus. At the same time, Exxon will be able to apply its leadership in the unconventional sector to the U.K. — the move makes sense for the firm as well as investors.
As for supplying that fracking equipment, Halliburton (NYSE:HAL) might be the oil service kingpin of North America, but Schlumberger (NYSE:SLB) supplies the world and is the dominant player overseas. That includes equipment that lessens the environmental impact and smaller operational footprints — factors that are very important to most Europeans. That puts SLB in the driving position when it comes to supplying equipment in England.
More importantly, as historically low natural gas prices have hurt fracking margins in the U.S., the U.K.’s higher gas prices give Schlumberger more wiggle room on pricing. That will help boost earnings at the global firm more easily than rivals.
England’s shale gas revolution still is in its nascent stages. Both Exxon and Schlumberger could give U.S. investors a chance to participate.
As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.