The North America OFS Landscape is Changing
(The views and opinions expressed in this article are those of the attributed sources and do not necessarily reflect the position of Rigzone or the author.)
Early this month, two major oilfield services (OFS) players revealed plans that will affect how pressure pumping will be delivered in North America. Before 2020 draws to a close, expect to see more announcements that will alter the OFS landscape, predicts one of Rigzone’s regular oil and gas prognosticators. He suggests the contours of this evolving landscape will largely hinge on two variables. Find out which variables, along with other perspectives, in this week’s installment of what to watch in the oil and gas market.
Tom Curran, Senior Energy Services and Equipment Analyst in Equity Research, B. Riley FBR, Inc.: We suspect the deal announced on Sept. 1, 2020, between Liberty Oilfield Services (NYSE: LBRT) and Schlumberger (NYSE: SLB), in which the former will acquire the latter’s North American pressure pumping business, OneStim, in exchange for a 37-percent equity stake in the Newco, has likely marked the start of a new wave of consolidation given the accumulated mergers and acquisitions (M&A) signals we’ve detected over the past several weeks. Between now and year-end, we anticipate additional, significant M&A and will remain attentive to potential indications of the where (oilfield services niche) and who (public buyer and/or seller) of the next transaction.
Barani Krishnan, Senior Commodities Analyst at Investing.com: Some serious reckoning over real demand – or the lack of – with the advent of the fall season, which is typically sluggish for oil. To kick off, we have market intelligence firm Genscape estimating a Cushing build of 2,114,176 barrels for the week to Sept. 22. Surely, that must matter for something.
Marc Le Dain, vice president of strategy with the oil and gas data firm Validere: It will be interesting to see if product draws continue. There is likely a bit of a continued tailwind between kids still back at school, where transportation is not immaterial to total demand, and with harvests in many states.
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