Oilfield Housing Firm's Stumble May Herald More Oil Industry Pain

Target Logistics, the top temporary housing operator in North Dakota and one of the largest in the world, says it is finishing 2014 with "high utilization" at its facilities. The privately-held company declined to be more specific, but said it did not expect a decline in 2015 occupancy.

Analysts say the company has been able to land long-term contracts with companies like Halliburton Co and EOG Resources Inc, by offering them the size and scale Civeo cannot match. In North Dakota alone, Target Logistics has 10 camps and touts its ability to quickly add housing wherever needed.

To save cash, oil producers have already started to ask drilling and well completion services firms to cut their prices by 10 to 30 percent, said PacWest, an energy consultancy in Houston.

That is hurting the most so-called pressure pumpers, often small privately-held firms, that run fleets of diesel engines used to generate power for hydraulic fracturing jobs.

"We expect cash flow and solvency challenges and more consolidation in the industry," PacWest said earlier this month.

Kirby Corp, which moves crude and other fuels by barge, issued a profit warning in December as its business overhauling diesel engines in onshore fields was hit harder by the oil slide than earlier anticipated.

The largest services companies, Halliburton and Schlumberger , have said they will reduce headcount, while BP Plc announced a $1 billion restructuring.


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