Some big acquisition news in the oilfield service industry today, as Baker Hughes (NYSE: BHI) announced that it would be buying BJ Services (NYSE: BJS).

The deal is for cash and stock, and is reportedly valued at $5.5 billion.

According to the details that have been released, BJS stockholders will be getting 0.40035 shares of BHI stock in addition to $2.69 in cash.

"Many experts believe that oil prices are at unsustainably low prices now, and they expect a sharp rise in the commodity price as supply and demand come back into line again," says turnaround expert George Putnam.

In The Turnaround Letter, he suggests, "If oil does begin to rise again, the oilfield service stocks could rebound sharply." Here, he takes a look at large cap plays on a rebound within the oilfield services sector.

"We all know that oil prices have fallen dramatically from their highs in the summer of 2008. But different types of oil-related stocks have reacted quite differently to the price change in the underlying commodity.

"For example, while oil itself has dropped nearly 70% from its 12-month high, the stock of the largest integrated oil company, Exxon-Mobil (NYSE: XOM), is down only 26%, less than the stock market as a whole.

Halliburton Company (NYSE: HAL) today reported better-than-expected results, proving its many naysayers wrong. The oil service giant posted EPS at $0.63 and revenues at $3.7 billion, both above the $0.56 EPS and $3.5 billion revenue expectations from Thomson Financial.

We already knew about the gain from the past KBR Inc. (NYSE: KBR) spin-off (not included in above numbers for ease of comparison), so that was already baked into the cake. The company noted a rebound in North America, saying "in June we experienced the highest monthly United States well stimulation revenue in our history." The Canadian operations, though, continued to be weak.

Halliburton has been redefining itself for the future, and the naysayers who have been arguing against the stock are probably scratching their scalps as they try to find a fault in the report today. Its corporate move to Dubai should help it compete for more Middle East contracts, its investments in Russia are paying off, it is still buying back shares (25.746 million at an average price of $35.37 in Q2 alone) and it's already spun-off KBR.

This was also one of Jim Cramer's "Top 9 for 2007" and is performing quite well, with shares up almost 3% at 52-week highs in early trading. Compared to other oil services stocks, this one is not at all-time highs, since it did trade north of $40.00 in early 2006 before some of its woes came to light.

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

MOST NOTEWORTHY: The Oilfield Services and Marvel (MVL) top today's lengthy list of initiations.

• While Stifel Nicolaus expects continued inconsistency through the election and into winter as oil and natural gas prices seek their levels, the broker remains constructive on the sector through 2007:
  • STFL initiated FMC Technologies, Inc (NYSE: FTI, target $64), National Oilwell Varco, Inc. (NYSE: NOV, target $80) and Superior Energy Services, Inc. (NYSE: SPN, target $42) with Buy ratings,
  • and Hydril Co. (NASDAQ: HYDL) and Oil States International, Inc. (NYSE: OIS) with Hold ratings.
• Janco initiated Marvel Entertainment Inc. (NYSE: MVL) with an Accumulate rating and $28 target. The firm expects Marvel shares will benefit from strong near term growth prospects as a licensor of content in 2007 for theatrical releases including Spiderman 3, Fantastic Four 2, and Ghost Rider.

OTHER INITIATIONS:

• Citigroup initiated Atlas Pipeline Partners (NYSE: APL) with a Buy and $51 target, citing undervalued shares given a higher than average yield.
• Robert. W. Baird initiated Black & Decker Corp. (NYSE: BDK) with an Outperform and $99 target. The firm is positive on Black & Decker's valuation, solid operating execution, strong capital discipline, and free cash flow profile.
• Susquehanna started Kanbay International Inc. (NASDAQ: KBAY) with a Positive. The firm is positive on Kanbay's acquisition of Adjoined Consulting and cross-selling opportunities. The analysts expects a major book retailer, food distributor, or car rental company to buy Kanbay solutions product by year end. The firm adds that Infosys' (INFY) ADR offering creates a favorable bias towards Kanbay.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).