The cleaver, the scalpel, and then, finally, some glue…

A look at operating model adjustments, M&A, and collaboration within the oilfield equipment manufacturing sector through the industry decline of the past year and a half.
The butcher’s bill for the whole of the oilfield services sector has been extensive in the wake of WTI’s mid $20s bottoming and the resulting CAPEX austerity. With liquidity preservation understandably serving as priority one for E&P customers during the maelstrom, short-cycle activity ground to a standstill and orders – both via capital equipment deferral/cancellation and inventory cannibalization for consumables – dried up completely. The recent WTI recovery to the mid $40s has only just now begun to shake loose an increase in customer inquiries. While the rig count has shown signs of modest uplift with speculation regarding the return of completions work, most operators are still characterizing the inquiry lift as yellow shoots – that is, the phone is ringing more but it’s not yet meaningfully translating into purchase orders or booked jobs. [Read more…]

Thriving and Surviving in Oil & Gas

It’s been happening all our lives. Oil & Gas prices fluctuate, and with the ups and downs, the industry adapts and looks to thrive—and more recently, to survive. In 2015, when oil fell to its lowest price in seven years, more than 100,000 jobs were shed and organizations looked to slash billions in spending.  It’s a cycle. It always has been, and always will be. Despite this fact, there is technology on the horizon that can help organizations make right-size investments during the survival phase.
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Oil and Gas Cost Savings: Time is the Most Valuable Commodity

Focus on what you can control.
The historic decline in the price of oil, which has dropped 70 percent since the summer of 2014, brought with it operational challenges for oil and gas enterprises, including unprecedented headcount and CAPEX reductions. New performance strategies ensuring production uptime, particularly in aging assets both upstream and downstream, and establishing efficient workflow processes are vital to improved and profitable business operations, returning some control in a struggling climate.
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Breakout Together – Consolidating in a Time of a Shakeup

In the past year, leading oil and gas companies across the supply chain have announced plans to significantly reorganize, signaling a broader industry trend of consolidation. For instance, Hercules Offshore, a major drilling services provider that once had a market capitalization of over a billion dollars, recently filed for Chapter 11 bankruptcy. In April 2015, Shell announced its plan to acquire BG Group for $70 billion. To better understand the impact of lower commodity prices and implications to distressed players it is important to analyze trends in two common exit strategies: bankruptcy and M&A.
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