Joe Gibney | Capital One Securities
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…]