The energy service segment includes companies involved in drilling, completion, management and re-completion of crude oil and natural gas wells; manufacturers of equipment such as pipes, pumps and other specialty tools for all segments of the industry; and providers of a diverse range of specialty services ranging from production control to fluids handling and pollution management. Power service companies include those that provide engineering, construction and maintenance service for generation, transmission and distribution infrastructure.

Energy and power service companies typically provide participants in all aspects of the energy industry with the ability to outsource certain products and services, which has become increasingly important in recent years, as companies throughout the industry have placed greater emphasis on improving returns on capital. Energy and power service companies generate revenues, earnings and returns in a variety of ways depending on the specific product or service being provided. Many energy and power service companies have high operating leverage, as many areas within the segment are capital-intensive and have a relatively high component of fixed costs. As a result, earnings and cash flows for many segment participants have been volatile in recent years, as have related returns on capital. Most energy and power service companies are dependent on activity and spending levels of other industry segments, and as such, they tend to prosper most when other segments are performing well. Other companies in this segment are much less dependent on the performance of other segments and can generate favorable earnings and returns in all phases of the industry cycle.