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Baker Hughes woes continue

Oil field services company Baker Hughes reports steep decline in business activity in North America, stressing its looking forward to imminent merger with rival Halliburton. Photo by Lilac Mountain/Shutterstock HOUSTON, Oct. 21 (UPI) — Oil field services company Baker Hughes reported a steep decline in revenue from North American operations, stressing its merger with Halliburton was progressing. Companies like Baker Hughes that work in the exploration and production, or upstream, side of the energy sector are facing economic headwinds in an era of historically low oil prices. Baker Hughes said third quarter revenue in North America alone was down 57 percent year-on-year because of "sharply lower activity and unfavorable pricing." In its weekly rig count report, a metric used to gauge the health of the exploration and production sector, Baker Hughes reported the seventh-straight weekly decline in activity in the United States. "In North America, margins declined further driven […]

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Baker Hughes Revenues Down 39% Since One Year Ago

Baker Hughes’ revenues for 3Q 2015 are down 39 percent, compared to one year ago. Oilfield services giant Baker Hughes saw revenues drop to $3.8 billion for 3Q 2015, down 39 percent compared to 3Q 2014, and a 5 percent decrease from last quarter. “Compared to the third quarter of 2014, revenue in North America declined 57 percent on sharply lower activity and unfavorable pricing, while actions we have taken to right-size our operational structure resulted in decremental adjusted operation profit margins of 30 percent,” Baker Hughes CEO Martin Craighead said in a company release. A reduction in customer spending is the cause for less drilling in the fourth quarter , Reuters reported. An Evercore analyst report stated that Baker Hughes continues to see a shift in spending, which favors production optimization projects over exploration and development (E&P) work. This will result in further activity and pricing weakness in […]

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OPEC Is About to Crush the U.S. Oil Boom

After a year suffering the economic consequences of the oil price slump, OPEC is finally on the cusp of choking off growth in U.S. crude output. The nation’s production is almost back down to the level pumped in November, when the Organization of Petroleum Exporting Countries switched its strategy to focus on battering competitors and reclaiming market share. As the U.S. wilts, demand for OPEC’s crude will grow in 2015, ending two years of retreat, the International Energy Agency estimates. While cratering prices and historic cutbacks in drilling have taken their toll on the U.S., OPEC members have also paid a heavy price. A year of plunging government revenues, growing budget deficits and slumping currencies has left several members grappling with severe economic problems . The fact that the U.S. oil boom kept going for about six months after the group’s November decision also means OPEC has so far […]

Posted On : Published By : Tom Whipple
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U.S. oil output slide looms as shale firms hit productivity wall

An oil pump jack can be seen in Cisco, Texas, August 23, 2015. Stagnating rig productivity shows U.S. shale oil producers are running out of tricks to pump more with less in the face of crashing prices and points to a slide in output that should help rebalance global markets. Over the 16 months of the crude price rout, production from new wells drilled by each rig has risen about 30 percent as companies refined their techniques, idled slower rigs and shifted crews and high-speed rigs to "sweet spots" with the most oil. Such "high-grading" helped shale oil firms push U.S. output to the loftiest levels in decades even as oil tumbled by half to less than $50 a barrel and firms slashed rig fleets by 60 percent. But recent government and private data show output per rig is now flatlining as the industry reaches the limits of what […]

Posted On : Published By : Tom Whipple
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Oil well out of control in North Dakota

Oil is still leaking as Oasis Petroleum works to get well under control after reporting incident to the North Dakota Health Department during the weekend. Photo by David Gaylor/Shutterstock BISMARCK, N.D., Oct. 20 (UPI) — An oil well in western North Dakota is out of control at least three days after a spill was reported, the state Department of Health reported. The Health Department said it was notified of the spill by Oasis Petroleum, which said it lost control of the well Saturday night local time. Bill Suess, a spill manager for the department, was quoted by the Grand Forks Herald as saying about 1,760 barrels of oil were recovered so far from the well site. "It’s a significant leak," he said. There was no statement on the spill from Oasis Petroleum. The Health Department said light sheen was observed on the White Earth River a little less than […]

Posted On : Published By : Tom Whipple
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OPEC has stalled the shale revolution

( John Kemp is a Reuters market analyst. The views expressed are his own) Oct 20 (Reuters) – The resilience of U.S. shale producers has surpassed all expectations as they have wrung extra efficiencies out of their operations and pulled rigs back to the most prolific sections of existing plays. The shale sector’s ability to cut costs and sustain their output in the face of plunging prices has been extraordinary and testament to the entrepreneurial spirit and technical skill of the independent producers. Shale producers are justifiably proud of their ability to survive the perfect storm that has hit their industry since the middle of 2014. But it should not disguise the fact that the collapse in oil prices has paused the shale revolution, with the sector’s focus shifting from growth to survival. The revolution cannot be reversed. Techniques once mastered will not be unlearned. And adversity has forced […]

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Halliburton Cuts More Jobs as Fracking Hit Worst in Downturn

Halliburton Co. cut another 2,000 jobs in the past month as the worst oil market slump in decades saps demand for work at the world’s largest provider of fracking services. The Houston-based company said the first quarter of next year may represent the lowest point for its North American profit margin as customers start fresh with new spending budgets for 2016 and tap Halliburton’s pressure-pumping expertise to start new wells. The comments came after the company reported a third-quarter loss of $54 million. "The pumping business in North American is clearly the most stressed segment of the market today, but it’s also the market we know the best," President Jeff Miller told analysts and investors Monday on a conference call. "This is the segment that we expect to rebound the most sharply." Oil has swung between a bear and a bull market in North America this year as the […]

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Number of North Dakota oil drilling rigs hold steady

The North Dakota oil rig count held steady at 68 this week, the state’s Department of Mineral Resources reported Monday. Photo by David Gaylor/Shutterstock BISMARCK, N.D., Oct. 19 (UPI) — North Dakota reported Monday that 68 oil rigs are involved in exploration and production in the state, the same figure as last week. Despite the recent stability, the number is down from 190 active drilling rigs on the same date in 2014, when crude oil prices were about 42 percent higher. The count serves as an indicator of the health of the energy sector in North Dakota, the No. 2 oil producing state. North Dakota oil production peaked in December 2014 and has fallen every month since , the state’s Department of Mineral Resources reported last week. World oil prices fell to a six-year low in August, the International Energy Agency reported. The price of North Dakota oil, which […]

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Oasis Well In North Dakota Out Of Control, Leaking Oil And Brine

WILLISTON, N.D., Oct 19 (Reuters) – A North Dakota oil well owned by Oasis Petroleum Inc blew out over the weekend and is leaking an unknown amount of crude and saltwater, state officials said on Monday. The well is located about 15 miles south of White Earth, North Dakota, in Mountrail County, one of the more-prolific oil-producing regions in the state. The blowout happened at 11 p.m. local time, Saturday, Oct. 17, and the company worked all weekend to regain control of the well but so far has been unsuccessful, the North Dakota Department of Health said in a statement. A light sheen of oil was spotted about 850 feet (259.08 m)away from the well on the White Earth River, a tributary of the Missouri River, and an absorbent boom has been installed in an attempt to keep the oil from moving downstream, state officials said. Crude oil extracted […]

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Once Hot, Master Limited Partnerships Reel From Sharp Selloff

Energy pipeline and storage companies were one of the hottest investments on Wall Street, offering steadily higher payouts, tax benefits and insulation from wild swings in oil prices. Now, investors are contending with a sharp selloff in master limited partnerships that has outpaced the fall in oil prices . Deal making in the sector has slowed and investors say they are calling into question the ability of MLPs to keep up the steady pace of payout increases as U.S. oil output finally starts to decline. The yearslong boom in U.S. oil production fueled the proliferation of MLPs. The companies transport, store, produce and refine energy, passing on the bulk of their earnings to shareholders. Income-starved investors flocked to the sector, lured by the companies’ assurances of steady payout increases and their tax advantages. Since 2009, MLPs have raised more than $100 billion from initial public offerings and follow-on stock […]

Posted On : Published By : Tom Whipple