Oilfield service firms see grim outlook ahead

Jul. 25, 2019 6:44 PM ETHelmerich & Payne, Inc. (HP), PTEN, SPNX, NBR, PDS, DO, VAL, NE, RIG, SDRL, XLE, VDE, XOP, ERX, OIH, XES, ERY, DIG, BGR, GUSH, FENY, IYE, DUG, DRIP, IEO, FIF, IEZ, NDP, PXE, RYE, PXJ, PD:CAPTEN, XLE, IYE, OIH, VDE, RIG, PXE, PXJ, HP, SPNX, NBR, NE, IEO, IEZ, XES, XOP, BGR, FIF, PDS, RYE, DUG, DIG, ERY, ERX, SDRL, NDP, FENY, GUSH, DRIP, DO, VALBy: Carl Surran, SA News Editor51 Comments
  • Helmerich & Payne (NYSE:HP) fell to six-month lows in today's trade as CEO John Lindsay warned of more pain ahead in the downtrodden oilfield services industry.
  • "The full effect of the industry's emphasis on disciplined capital spending continues to reverberate through the oil field services sector," Lindsay said. "We are reluctant to predict another bottom and see further softening" during the company's FQ4.
  • Lindsay said most of HP's customers have spent more than half of their drilling budgets in H1, and the company plans to exit the current quarter running 193-203 rigs, down from 207 rigs in the U.S. currently.
  • Rival driller Patterson-UTI Energy (NASDAQ:PTEN) also expects to run fewer rigs this quarter, averaging 142 vs. 158 previously.
  • Superior Energy Services (NYSE:SPN), meanwhile, said earlier this week it dropped three hydraulic fracturing fleets in Q2, bringing its total in operation to six, and that it may sell assets to raise cash.
  • The frack market "is a mess," says Jefferies analyst Brad Handler. "With every passing datapoint/call, there is little to suggest this market gets any better."
  • In today's trade, HP closed -3.7%, PTEN -7.3%, NBR -8.4%, PDS -4.6%DO -4.7%, ESV -6.4%, NE -7.2%, RIG -4.7%, SDRL -3.9%.
  • ETFs: XLE, VDE, XOP, ERX, OIH, XES, ERY, DIG, BGR, GUSH, FENY, IYE, DUG, DRIP, IEO, FIF, IEZ, NDP, PXE, RYE, PXJ

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