Oilfield service companies announce second quarter numbers

This year’s second quarter numbers have started to look better for the majority of the companies involved in the energy industry. Companies have cut costs, sold assets, and merged with larger rivals to make ends meet since the oil market crash.

Houston-based National Oilwell Varco reported a net loss of $75 million for the second quarter of this year. This betters the net loss of $217 million in the second quarter of 2016. Profiting from the Texas shale boom, National Oilwell Varco’s revenue from the second quarter totaled $1.76 billion, a 2% increase from the same time last year, but the company did have to cut 1,500 jobs in the first half of 2017.

“Scarcity is returning to the oilfield, and, around the world, customers are steadily exhausting excess stocks of the critical products, equipment and technologies we supply, laying the groundwork for future demand,” National Oilwell Varco chairman and chief executive officer, Clay Williams said. “The strong recovery we’ve seen thus far in North America, combined with many international markets stabilizing and offshore markets nearing bottom, makes us optimistic in our outlook.”

The offshore services giant TechnipFMC reported a second quarter profit of $165 million. The company completed a merger early this year; Houston-based FMC and the French company Technip joined and now share operational headquarters in both Houston and Paris.

Their reported second quarter profit comes after foreign currency exchange mistakes caused the initial report of a first quarter profit of $191 million turn into an actual $19 million loss. The chief executive officer of TechnipFMC, Doug Pferdehirt assures the problems with financial reporting has been fixed.

TechnipFMC’s total revenues for the second quarter were $3.85 billion, which is actually down 22.5 percent from last year. The company also reported cutting more than 1,000 jobs this year.

Pferdehirt commented, “We just passed our six-month anniversary as a new company, and our merger integration efforts are delivering results. While project economics continue to improve, the recent commodity price uncertainty could result in a slowing of the pace of the recovery.”

Weatherford International, a Houston-based oilfield service company, reported a net loss of $171 million for the second quarter of 2017. The loss is an improvement over 2016’s second quarter net loss of $565 million.

Weatherford did not cut a large number of jobs in the second quarter since the company had already cut roughly 3,000 jobs late 2016 and early 2017. In an effort to right the ship, the struggling service company recently acquired a new chief executive officer, Mark McCollum, from rival Haliburton. Weatherford will also close on a joint venture, OneStim, with Schlumberger later this year. OneStim will provide fracking technologies and services.

McCollum summed up the service industry’s outlook for the rest of the year, “We believe our industry will remain range bound within this ‘medium-for-longer’ price level for some time, until production growth is moderated. In the interim, we expect continuous short-term cyclical fluctuations. Adapting to this likely new paradigm, our industry must transform itself. We will continue to push innovation.”

Article written by HEI contributor Raymond Arrasmith.

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