One of the market’s greatest “boom and bust” sectors is booming right now.

Oil services companies – the firms that sell vital products and services to oil and gas producers – are raking in cash. Schlumberger, the industry’s largest player, just reported earnings for its most recent quarter rose 64%. The industry’s second-largest player, Halliburton, reported a 54% increase in profit.

The results are showing up in shareholders’ accounts: The big oil services fund PXJ is up 77% since August.

[ad#Google Adsense 336×280-IA]Part of that trend is driven by oil prices, which have held above $90 a barrel since February of this year. Another big driver here is a trend Growth Stock Wire readers have been on top of for years…

One of the biggest trends going today, and one that will last for decades, is the boom in finding large “unconventional” natural gas fields. Because of these new fields, the U.S. boasts over 272 trillion cubic feet of natural gas reserves today, up from the 162 trillion cubic feet we had just 15 years ago.

The thing is, these fields require special drilling techniques (called “fracking”) to extract the gas… These techniques are costly, and not many companies specialize in them. That’s why you’re seeing a chart like this in Halliburton… one of the two best fracking companies in the world:

Halliburton saw its fracking division revenues rise 16% this quarter. It also managed a whopping 30% profit margin on those services. The stock has more than doubled since August… But that’s nothing compared to my favorite play on the frac boom.

Carbo Ceramics is a unique oil services stock. Unlike Schlumberger Halliburton, which provide a wide variety of oilfield services, Carbo specializes in one critical part of fracking operations. As my colleague Brian Hunt puts it, Carbo makes “frac ammo” – ceramic spheres that hold open layers of rock to allow the gas out.

It’s this ammo that makes the whole technique work. You don’t have it, the gas and oil doesn’t flow.

My S&A Resource Report readers bought Carbo in February 2010. We’re up almost 200% on the trade. As you can see from the chart below, it’s an incredible uptrend.

Because Carbo is a “pure play” on the frac boom, it’s one of my favorite oil services stocks for the long term. But giants like Schlumberger and Halliburton will all continue to profit over the next few years as the trend continues. Make sure you’re on board.

Good investing,

— Matt Badiali

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Source:  The Growth Stock Wire