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Baker Hughes basics

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Dec. 4 2020, Updated 10:52 a.m. ET

Basic business of Baker Hughes

Baker Hughes (BHI) is a leading supplier of oilfield services, products, technology, and systems to the worldwide oil and natural gas industry. The company also offers industrial products and services to the downstream refining, process, and pipeline industries.

BHI operates in 80 countries. Over half of the company’s workforce is outside of the US. In terms of market cap, Baker Hughes has one of the top three oil services stocks, behind Schlumberger (SLB) and Halliburton (HAL).

BHI’s oilfield products and services fall into two groups based on two distinct phases of construction:

  • Drilling and Evaluation
  • Completion and Production

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Drilling and Evaluation

The Drilling and Evaluation business consists of the following major products and services:

  • Drill bits, which companies use for performance drilling, hole enlargement, and coring
  • Drilling services, which include conventional and rotary steerable systems used to drill wells directionally and horizontally; measurement-while-drilling and logging-while-drilling systems used to perform reservoir navigation services; drilling optimization services; tools for coil tubing drilling and wellbore re-entry systems; coring drilling systems; and surface logging
  • Wireline tools and services, which include tools for both open hole and cased hole well logging used to gather data to perform petrophysical and geophysical analysis; reservoir evaluation coring; casing perforation; fluid characterization; production logging; well integrity testing; pipe recovery; and seismic and microseismic services
  • Drilling and completion fluids and systems, which include emulsion and water-based drilling fluids systems; reservoir drill-in fluids; and fluids environmental services

Completion and Production

The Completion and Production group consists of the following major products and services:

  • Completion systems, which include products and services used to control the flow of hydrocarbons within a wellbore
  • Wellbore intervention, which includes products and services used in existing wellbores to improve their performance
  • Intelligent production systems, which include products and services used to monitor and dynamically control production from individual wells or fields
  • Artificial lift, which includes electric submersible pump systems; progressing cavity pump systems; gas lift systems; and surface horizontal pumping systems used to lift large volumes of oil and water when a reservoir is no longer able to flow on its own
  • Upstream chemicals and systems, which include chemicals and chemical application systems that provide flow assurance, integrity management, and production management for upstream hydrocarbon production
  • Pressure pumping, which includes cementing, stimulation, hydraulic fracturing, and coil tubing services used in the completion of new oil and natural gas wells

Other merger arbitrage resources

Other important merger spreads include the deal between Hospira (HSP) and Pfizer (PFE). For a primer on risk arbitrage investing, read Merger arbitrage must-knows: A key guide for investors.

Investors who are interested in trading in the energy sector should look at the Energy Select SPDR ETF (XLE).

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