BREAKING: Half of U.S. Fracking Companies ‘Dead or Sold’ This Year
Half of the 41 fracking companies now operating in the United States will be dead or sold this year, an executive at Weatherford International Plc told Bloomberg Business yesterday.
“There could be about 20 companies left that provide hydraulic fracturing services,” Bloomberg reports, citing an interview with Rob Fulks, Weatherford’s pressure pumping marketing director. “Demand for fracking, a production method that along with horizontal drilling spurred a boom in U.S. oil and natural gas output, has declined as customers leave wells uncompleted because of low prices.”
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Weatherford, with the country’s fifth-largest fracking operation, has cut costs “dramatically” in response to customer demand, Fulks told Bloomberg. He wouldn’t say whether the company would try to buy out any of its competitors. “We go by and we see yards are locked up and the doors are closed,” he said. “It’s not good for equipment to park anything, whether it’s an airplane, a frack pump, or a car.”
At the beginning of this year, “there were 61 fracking service providers in the U.S., the world’s largest market,” Wethe writes. “Consolidation among bigger players began with Halliburton Co. announcing plans to buy Baker Hughes Inc. in November for $34.6 billion, and C&J Energy Services Ltd. buying the pressure-pumping business of Nabors Industries Ltd.”
Beyond the U.S., “oil companies are cutting more than $100 billion in spending globally after prices fell. Frack pricing is expected to fall as much as 35% this year.”