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hi steve

I take away the opposite--Core will have the equipment that you can get from HAl or SLB and it's almost a loss leader, but cross selling puts scientists and employees at the E&Ps disposal to evaluate the data from the instruments/products.

Both HAL and SLB have consulting services to do things like plan fracks and field development. SLB does core samples too. I imagine both HAL and SLB take business away from CORE especially since they can cross sell more effectively. But it does seem like their evaluation and enhancement segments are smaller. HAL says they have 450 employees. I am sure the competition is serious and does take business away from CORE. Unfortunately it's not easy to quantify because the eval/enhancement business is included with other services.

What we have is CORE saying they have 1300 well-qualified scientists that specialize in just this one aspect of O&G and stay with CORE over time. Whether or not this is a valuable moat is hard to say. It's quite likely the moat is assailable and if so, revenue will not stay with mid-teen growth and margins may shrink if they start losing customers to the companies with better equipped cross selling. I can't tell how wide the moat is. I do agree that the broader oil field services companies have to include lower margin business and CORE does not do anything similar to drill bits, cementing etc. keeping the margins high and returns better. That keeps CORE focused and probably better at the few things they do.

There is a really interesting research group called BlueShift that goes into the field and interviews customers that use the services. Without relying on company PR, you almost need this boots on the ground approach to see what's up. I just don't have a first hand feel of how good HAL and SLB do with relatively smaller segments against a specialist like CORE outside of what the company says on their own behalf. My impression is that a specialist will get the work that others can't do and that's where CORE sits for a large part of the business. Deep sea and shale are tough environments and CORE has data and patents that put them slightly ahead of competition.

Does M* have any ratings for a moat?
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