News developments from last week will cause lingering effects for Texas energy companies this week and beyond. Most notably was the release of earning reports from key players in the industry as well as a conference that was also affected by the state of the current market. However, there is some good news amongst the bad.
Unfortunately, the jobs cuts seem to continue for some companies. Houston-based Weatherford International PLC (NYSE: WFT) announced that it would increase job cuts this year by 1,000 employees. As laid out in their second-quarter earnings report, they will be cutting a total of 11,000 jobs this year. The effect of the oil slump is also hitting FMC Technologies, Inc. (NYSE: FTI) jobs. The Houston-company also announced their intention to cut more jobs in 2015. This is in addition to the 2,000 job cuts already announced earlier this year.
After gauging the marketplace, Exterran Holdings, Inc. (NYSE: EXH) made the decision to delay the launch of its spinoff company. Plans for what would be the stand-alone entity named Exterran Corp. will have to wait until a positive forecast is on the horizon. Instead, this Houston-based energy company will delay even announcing when the launch will officially occur.
Delays became something of a theme last week with the U.S. Department of Justice delaying a proposed merger between Houston-based Halliburton Co. (NYSE: HAL) and Baker Hughes Inc. (NYSE: BHI). This $34.6 billion merger is receiving opposition due to the effect it could have on hurting competition in the industry. The second quarter earnings announcement from Halliburton highlighted the company’s plans for spending cuts that will occur over the remainder of the year.
Effects of the downturn in low crude oil prices were noticeable at the Unconventional Resources Technology Conference, which took place in San Antonio last week. The number of attendees dropped from 5,000 in 2014 to 3,000 this year. However, conference attendees did have the opportunity to gain a better understanding of the benefits offered by cost-lowering technologies. The most popular technologies this year focused on rock analytical sciences, geochemistry, microseismic monitoring and completion services and refracking services.
A continuing and developing story comes from Ridgewood Energy Corp. as their projects in the Gulf of Mexico closed its latest private equity fund of $1.9 billion. This investment garnered more interest than expected and will be used to fund the finding and development of oil in the Gulf for $20 per barrel. Although Ridgewood believes it can go below this estimate.