Sanford C. Bernstein Ltd. analyst Ben P. Dell says the long-term outlook for the pressure-pumping segment of the energy industry is strong and will remain so for some time to come.

“We estimate 11.5% secular growth driven by well stimulation in unconventional gas plays,” Dell says. “While gas prices have improved the near-term demand outlook, 12% to 15% capacity growth clouds the margin outlook.”

He is giving an Outperform rating on Halliburton Co., Houston, (NYSE: HAL) and Patterson-UTI Energy Inc., Snyder, Texas (Nasdaq: PTEN), and Market Perform on Schlumberger Ltd., Houston (NYSE: SLB).

“We believe North American pressure-pumping margins have bottomed and should rise 2% to 6% in 2009, partly reflecting below-normal margins currently,” Dell says. “However, this assumes the service players do not expanding capacity growth in the second half in anticipation of a rebound.” JAS