Halliburton, the big oilfield service company, reported earnings Monday in a challenging third quarter for the entire oil and gas industry. The company’s fortunes rise and fall with the fracking stage of the production process: first, a company drills a well, and then a service company like Halliburton takes over, shooting water and sand and chemicals down the well to coax the energy out.
That is, except when oil prices fall and the drilling and fracking stops.
“A lot of the workers out there are guys that work for Halliburton,” said Tom Fowler of the energy information firm Argus Media. “So when things started to turn south, the big job cuts were felt there most directly first. And they have been felt deeply.”
Low oil prices have idled 1,488 drill rigs in the past year, forcing Halliburton and its peers to cut up to 25 percent of workers, according to Oilpro.com. The problem is, there is still more oil supply than demand, and things will not improve until those return to balance.
“I think we’re in this period now of waiting for it to get worse before it can get better,” Joseph Triepke, Oilpro.com managing director, said. “It can be 12 months, it could be two years.”
Even then, a leaner Halliburton will likely stay lean. In the past year’s downturn, the company has innovated and learned to survive at lower prices.
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