Oil service firms eye new survival tactics amid weak U.S. market

As you can see fracking in fact total US oil production will peek this year. reality is oil field investment is plunging in the US. no one can make any money and investors are heading for the hills

(Reuters) – Packers Plus Energy Services, a company built on the North American shale oil boom, is turning to the Middle East to weather a new round of spending cuts by producers amid warnings of a looming oil glut. Oil production has outpaced demand by 900,000 barrels per day (Nick Note: This is nothing in a 100,000,000 (bpd) market) this year, according to the International Energy Agency, which expects increases to add a net 136 million barrels to the global surplus by March. Spending cuts by producers also have sharply cut service providers’ margins, a June survey of 60 providers by the Dallas Federal Reserve Bank revealed. The last time supplies overwhelmed demand, oilfield service suppliers cut 100s of thousands of jobs and top firms gushed red ink. Memories of that sharp downturn in late 2014 have executives such as Ian Bryant, chief executive officer of privately-held, Calgary-based Packers Plus, again cutting jobs, seeking safe harbors, mergers, or putting business units on the market. These defensive strategies comes as oil and gas drillers are producing vastly more oil with less investment. U.S. shale output is estimated to have hit 8.5 million bpd, (Nick Note: this is piss aunt prodution OPEC+ is capable of producing 60 milliom bpd.) even as the number of rigs in operation fell by almost 100 in the last year. On average, analysts expect the top 50 U.S. independent oil producers will cut spending by 20% this year, with some by as much as 60%, according to review by researcher DrillingInfo. Weatherford International, once a top four oilfield service provider, filed for protection from creditors this month and has been cutting staff, citing “market headwinds” and lack of access to financing.. Across the U.S. the number of yet-to-be-fracked wells hit 8,289 in May, up 22% in a year, according to the U.S. Energy Information Administration. Oil and gas employment in the United States has grown since the last downturn, but last month remained 20% below the same month in 2014, according to U.S. government data. Profits for service companies that added people and equipment following the 2015-2016 oil price collapse also have suffered. Oilfield equipment utilization fell nearly 13 points and profitability tumbled 26 points versus the previous quarter, according a June survey by the Dallas Federal Reserve bank. Its survey polled 60 oilfield service companies in Texas, New Mexico and Louisiana.Investors have so soured on the sector that there were no public equity offerings by oilfield service firms last quarter, said Drillinginfo, for the first time in more than three years. “There are not very many buyers,” said Sajjad Alam, an analyst for debt rating firm Moody’s Investors Service. “The market is still very weak and looks more uncertain today than it did earlier in the year.”