PHI, Inc. Competition
Now Viewing PHI, Inc.'s competition in: Oil and Gas Field Services
Call Preparation Questions
Customers, Marketing, Pricing, Competition
What geographic markets does the company sell to? - Small companies tend to specialize in serving a local market, while large companies serve multiple domestic and international markets.
Who are major customers? How much of the company's total business is from large customers? - Within the US, customers include thousands of major and independent oil and gas producers; international sales may be dominated by contracts with a few energy companies or national oil companies, such as PEMEX.
How much of the company’s business is won through competitive bidding? - Most contracts involve competitive bidding.
What has been the company's average dayrate in the past year? What trend is the company seeing in pricing? - During periods of high demand, dayrates for offshore drilling can exceed $300,000 for floating and $100,000 for jackup rigs. Dayrates for land drilling and workover services are less, but high demand can push rates above $15,000.
What distribution channels does the company use to sell its products and services? How large is the direct sales force? - Most companies sell through a direct sales force, but also through supply stores, independent distributors, and sales agents.
Who are the company’s major competitors? - Competitors include large diversified suppliers, regional companies, and small local or specialty suppliers.
What market position or share does the company have in each of its market segments? - While the industry is fragmented overall, some product or service segments are dominated by a handful of suppliers.
Competitive Landscape
Demand is driven by oil and gas prices. The profitability of individual companies depends on technical expertise and efficiency of operations. Large companies can offer a broad range of services. Small firms can compete effectively by specializing in a particular type of service or geographic area. The industry is capital-intensive: average annual revenue per employee is about $410,000.
Business Challenges
CRITICAL ISSUES
Drilling Rig Activity Tied to World Energy Prices - Investment in drilling is closely linked to world energy prices, which are volatile and can change dramatically within a year: spot prices for West Texas Intermediate in the US rose 98 percent from mid-2007 to mid-2008, for example. As a result, the active rig count in the US has risen and fallen over 25 percent a year multiple times the past 10 years. As fuel prices rise, searching for more marginal supply sources becomes more profitable.
Declining US Oil Production - Although new methods have improved production from existing fields, US crude oil production declined 27 percent from 1995 to 2005 as oil fields were depleted. More recently, the production decline has slowed to about 1 percent annually. Despite new exploration activity and high gas prices, which are driving a political movement to open offshore reserves to exploration, proven crude oil reserves have declined for the past 50 years and have leveled over the past decade at between 21 and 22 billion barrels.
Industries Where PHI, Inc. Competes
- Transportation Services
- Helicopter Services(primary)
- Aerospace & Defense
- Aerospace & Defense Maintenance & Service
- Energy & Utilities
- Oil & Gas Exploration & Production
