Few Big US Land Drillers Set To Ride Out Oil Downturn As Winners
Dec 18 (Reuters) - Large U.S. onshore drilling firms that operate new, faster rigs are best placed to weather the looming downturn brought by slumping crude prices and could gain market share from smaller drillers with considerable debt and outdated equipment.
Drillers are trimming rental rates for rigs and idling older machines as their clients, oil producers, slash 2015 spending.
Analysts say companies with considerable debt such as Nabors Industries Ltd and small private firms with less efficient rigs will scramble to keep them in operation. In contrast, those with new rigs, such as Helmerich & Payne Inc , will have more leeway to negotiate lower rates with producers and keep or even expand their business.
Rig rates of $25,000-$30,000 per day in the quarter ended Sept. 30, are expected to fall 20-25 percent or more next year and talks over lower rates are already underway, analysts said.
Capital One Securities said 600-800 rigs could be pulled out of service "with crude in the $50s."
About 28 U.S. land rigs were pulled out of service last week according to Baker Hughes, leaving the industry with 1820.
Even with fewer rigs, the U.S. government expects oil production to increase next year thanks to rising well productivity.
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