The Permian Basin is responsible for the greatest oil production gains in the U.S. in recent years. Over the past eight years, there has been phenomenal production growth in the Permian.
But recently a number of reports have highlighted a slowdown in U.S. shale oil growth. But Why? it’s not for lack of oil. In its most recent Drilling Productivity Report, each of the six regions tracked by the Energy Information Administration (EIA) — Anadarko, Appalachia, Bakken, Eagle Ford, Haynesville, Niobrara, and Permian — still showed a year-over-year increased in oil production. – forbes
But Wallstreet is demanding more “Free cash flow” from producers in the Permian Basin, that along with the Anti Fracking Officials in Colorado going after the oil industry, it looks as if A Perfect storm is approaching Liberty Oilfield Services.
This week The Colorado Oil and Gas Conservation Commission (COGCC) reaffirming its regulatory authority over oil and gas development in Weld County in a letter sent Monday from the commission’s attorney to the county’s attorney.
Liberty Oilfield Services biggest competitor Haliburton announced it was cutting back its fracking workforce.
Liberty Oilfield Services Stock
Liberty Oilfield Services declares $0.05 dividend
More bad news for FRAC Crews And Oilfield Services Companies
Chief Executive Chris Wright from Liberty frac
The firm has no plans to add more equipment to its fleets, Chief Executive Chris Wright told investors on an earnings call on Wednesday, adding that pricing pressures would remain until a capacity glut ends.
Denver, Colorado-based Liberty Oilfield Services operates 23 hydraulic fracturing fleets, which are used to pump water, sand and chemicals into the ground to complete shale oil wells. – liberty-oilfield-services-ceo-expects-pricing-pressure-to-continue.140/
Christopher Wright Talks About the Slowdown in Fracking
Good morning, everyone, and thank you for joining us. We’re pleased to discuss with you today our second quarter 2019 results. We’re proud to have delivered $0.32 fully diluted earnings per share in the second quarter, a 23% increase compared to $0.26 in the first quarter of 2019. Revenue in the quarter increased 1% to $542 million and adjusted EBITDA increased 9% to $19 million, each as compared to the first quarter of 2019. We were able to deliver this financial performance due to the continued executional excellence of our operations and supply chain teams plus close coordination with our customers on schedule.
Liberty’s operational teams in the field continued to excel in delivering the safest and most efficient service to our clients. This cements the strong relationships that we have with our customers and helps them bring the most cost-effective barrel of production to the market. These strong financial results enable us to continue to improve service quality, grow organically and return capital to stockholders.
For the 12-months ended June 30, 2019, we achieved a pretax return on capital employed of 23%, generated significant free cash flow and returned over $130 million to stockholders. Our first half of 2019 results reflect the strong demand for Liberty’s differential frac services. Based on visibility into our customers’ activity pipeline for the year, we believe demand for Liberty fleets will remain high through the third quarter. And we are working closely with our customers to mitigate the effect of operator budget exhaustion towards the end of the year. As in the start of 2019, we expect demand for Liberty’s services to be strong at the start of 2020 when operator budgets are renewed.
Operators are managing activity to not exceed their announced budgets. And therefore, the frac market will most likely experience utilization challenges in the fourth quarter of 2019. There continues to be an oversupply of frac fleets in the market, which is holding down pricing. We would not expect pricing to improve until the supply of actively staffed frac equipment balances with demand.
- Among 4 analysts covering Liberty Oilfield Services (NYSE:LBRT), 3 have Buy rating, 0 Sell and 1 Hold. Therefore 75% are positive.