It's Always Darkest Before The Dawn -- December 4, 2018
From Bloomberg:
The North American fracking market -- already expected
to be a downer for the holidays -- is turning out to be even worse than
expected, according to the world’s biggest oil-service provider.
Schlumberger Ltd. expects sales in the U.S. and Canada to drop 15
percent in the final three months of the year compared with the third
quarter, the company said Tuesday. A trio of factors including a plunge
in crude prices, exhausted exploration budgets and maxed-out pipelines
in America’s busiest field is prompting oil companies to let go of frack
crews.
“We are seeing a significantly larger drop in activity than we
expected, which is leading to a larger drop in pricing than we
anticipated,” Patrick Schorn, executive vice president at the Houston-
and Paris-based company, said in prepared remarks for an investor
presentation. “We continue to see the weakening of the hydraulic
fracturing market as temporary, with the expectation of a gradual
recovery taking place over the first half of 2019.”
The number of fracking crews at work in the Permian Basin of West
Texas and New Mexico is down 13 percent from a 2018 high in June,
according to Primary Vision Inc. Fracking, which involves blasting
water, sand and chemicals underground to release trapped hydrocarbons,
is the most expensive part of drilling wells.
This is just the latest in a series of downward revisions by
Schlumberger. In September, the company said a dearth of new pipeline
capacity in the Permian was cooling off the red-hot region, leading to
lower-than-expected third-quarter fracking results. Then a month later,
the company said the fourth quarter would be even worse.
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