The oil services sector has been hit hard by the oil crash. Customers have demanded lower rates. Sweeping job cuts have been required.

In this article, I’ll look at today’s interim results from US-focused energy services group Hunting (LSE: HTG) and compare them to recent figures from Petrofac (LSE: PFC) and John Wood Group (LSE: WG). Which oil services group is the best choice for investors as the oil market begins to rebalance?

Turning point?

Hunting won’t pay another dividend before 30 June 2018 as part of a refinancing deal announced by the firm today. The group reported a $77m loss for the first half of 2016, thanks to a 50% fall in revenue year-on-year.

Hunting’s focus on the US market means that it was heavily exposed to the rapid slowdown in the US shale industry. It has closed three manufacturing facilities and seven distribution centres over the last 18 months, as it’s sought to reduce surplus capacity. More than 2,100 of the group’s employees have been ‘downsized’, reducing headcount by a staggering 46%.

These figures may sound grim, but Hunting shares have risen slightly today. Investors have welcomed the news that the group’s restructuring process is now nearly complete. And revised banking facilities mean that it shouldn’t breach lending covenants before operating profits recover.

However, chief executive Dennis Proctor remains cautious, and said this morning that forecasts for the current year still depend on improved trading during the second half. Analysts currently expect Hunting to report a loss of $57m this year, with a return to break-even forecast for 2017.

In my view, Hunting shares look fully priced for at least the next couple of years. I think both Petrofac and Wood Group are likely to be more profitable buys at current levels.

Cheap income buys?

Neither Petrofac nor Wood has the heavy exposure to manufacturing that has caused problems for Hunting. Both also have a more balanced mix of customers and are expected to deliver solid profits this year.

Wood Group doesn’t look overly cheap on a forecast P/E of 15, but its low debt levels and strong free cash flow highlight its financial strength. When market conditions improve, profits should rise rapidly.

However, analysts don’t expect this to happen in the next 18 months. Forecasts for 2017 suggest profits will be broadly unchanged next year. Although the firm’s 3.5% dividend yield is reasonably appealing, the shares have had a strong run this year, climbing 16%.

I’m tempted to suggest that Petrofac could be a better buy. Revenue rose by 22% to $3.9bn during the first half of the year, while underlying net profit rose by 82% to $236m. Petrofac also had an order backlog of $17.4bn at the end of June — equivalent to two years’ work.

Petrofac shares now trade on 11 times 2016 forecast earnings, and offer a dividend yield of 5.9%. I believe now could be a good time to buy into the group’s recovery, and rate the firm as my pick in the oil services sector.

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Roland Head has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Petrofac. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.