Climbing to New Heights in Energy Services

Where to begin with Cameron International's (NYSE: CAM  ) wildly successful operations in both the fourth quarter and the entirety of 2012? Capitalizing on the strength of the deepwater market, it was able to avert the choppy waters in 2012 that some of the larger equipment and services companies had to navigate through. Companies like�Halliburton (NYSE: HAL  ) and�Baker Hughes� (NYSE: BHI  ) each suffered from a dramatic slowdown in drilling activity and increased pricing pressures in the North American market. �

Closing out the year, Cameron achieved record quarterly and yearly revenue of $2.4 billion and $8.5 billion, respectively. What drove this growth? Maybe a better question might be: "What segment didn't pull its weight?" The answer to the latter question is none, and if I had to answer the former I would be inclined to lean toward its deepsea systems segment.

Riding the deepsea tidal wave
This emerging drilling frontier awarded Cameron with 21 blowout preventer contracts and one full deepwater rig package in the fourth quarter. These orders certainly did their part in helping their operator achieve its highest order year in its nearly 180-year history. As of late, deepwater has shown that it has plenty of depth to share, a decent portion of it also found its way over to�Core Laboratories� (NYSE: CLB  ) . Core's fourth quarter was its most profitable ever.�

Joint venture on the ocean floor
In order to tighten its grip on this market, Cameron International signed up for a joint venture with�Schlumberger� (NYSE: SLB  ) to form OneSubsea. Moving forward, Cameron will own 60% of the venture, which hopes to develop products and services for the expanding subsea completion and production market. Schlumberger CEO Paal Kibsgaard recently had this to say about it:

[The] creation of OneSubsea will allow us to make a much more significant entry into the overall subsea business. We have some very good ... niche technologies, and Framo has seen tremendous growth in recent years. But it was evident that we need to combine that with a much broader offering. And I think�Cameron is going to be�an excellent partner for us...

Full speed ahead
With a record backlog of $8.6 billion (greater than its record 2012 revenue), Cameron knows that it can't afford to let up. This is exactly why the venture with Schlumberger will be so important and why management has guided for around $500 million in investment spending in 2013. This figure is up from the $427.3 million that it spent in 2012. Targeting its drilling infrastructure, management is focused on attaining earnings per share growth between 22.5% and 30.7% in 2013. While this does fall short of the 44% growth in 2012, I find it hard to believe that shareholders will quibble about these lofty projections.�

Domestic oil and gas service companies have taken a hit due to a slowdown in the natural gas drilling boom of the last couple of years. As this market looks to rebound, investors would be wise to consider Halliburton, one of the top companies in the business and one of those most in tune with the domestic market. To access The Motley Fool's new premium research report on this industry stalwart, simply click here now and learn everything you need to know about how Halliburton is positioning itself both at home and abroad.