Date ArticleType
1/19/2018 Member News
Oil Field Services Could See Renewed Profits In 2018 (E&E News Subscription Required)

Oil field services could see renewed profits in 2018

Published: Friday, January 19, 2018- E&E News

The oil field services industry is optimistic about a possible change of fortune in 2018, with rising crude prices finally translating into renewed profits.

Services were among the oil industry's hardest-hit corners during the 2014 crash in prices, shedding hundreds of thousands of jobs. As demand for services flooded back in 2017, providers raced to hire workers and restart field operations in time, with much of their profits gobbled up in the effort.

Schlumberger Ltd. is expected today to report sales increases of more than $1 billion in the fourth quarter. And together with Baker Hughes, one of the other biggest oil field contractors, its shares are leading the Standard & Poor's 500 Energy Index.

Analysts at Tudor, Pickering, Holt & Co. said this week that investors should take the long view on oil field services stocks, forecasting modest increases in activity and prices this year across services and equipment.

"The climate is right for strong E&P [exploration and production] spending growth in 2018," wrote Charles Minervino, an analyst at Susquehanna Financial Group, in a recent note. "Many U.S. services companies have put more pressure pumping fleets back to work, hired personnel and gotten past the startup costs to make 2018 a very profitable year in oilfield services" (David Wethe, Bloomberg, Jan. 18). — DI