Oil service provider Weatherford latest casualty of U.S. shale sector’s financial struggles

first_img FacebookTwitterLinkedInEmailPrint分享The Wall Street Journal ($):A slowdown in U.S. drilling activity is taking a toll on the oil patch as Weatherford International PLC has become one of the biggest oil-and-gas bankruptcies in years.Among the world’s largest oil-field service companies, Swiss-based Weatherford filed for bankruptcy protection on Monday after bondholders approved a restructuring agreement that will reduce its total debt by almost $6 billion, or 70%. Five years ago, the company was worth more than $12 billion, but equity shareholders would be left virtually empty-handed if the reorganization is approved.U.S. oil production is topping all-time records, but producers have held back spending even as crude prices climb to almost $60 a barrel. Shale companies are under pressure from investors to live within their means after years of failing to do so. That fiscal restraint has weighed heavily on the oil-field service segment, the industry’s largest employer and often the first to bear the impact of financial headwinds in the energy sector.Almost 180 service companies have filed for bankruptcy since 2015, when prices plunged, affecting about $57 billion in debt, according to law firm Haynes and Boone LLP. While prospects for larger service providers, including Schlumberger Ltd. and Halliburton Co., are improving with an expected increase in international activity, Weatherford has been burdened by a heavy debt load.Shale companies have been reducing activity levels over the past six months while also demanding price reductions from the service companies that drill and frack wells for the producers. Shale companies have managed to maintain and even increase production by eking out efficiency gains, although they face tremendous pressure as capital dries up from Wall Street.Service companies are in a vise. The sector is experiencing both an increase in operational costs and a decrease in pricing and margins, according to a survey in June of oil-and-gas companies by the Dallas Federal Reserve.More ($): U.S. drilling slowdown triggers oil bankruptcy Oil service provider Weatherford latest casualty of U.S. shale sector’s financial struggleslast_img

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