The oil price is an important factor in oilfield services companies’ stock prices. Pressure pumper revenue is directly correlated to the price of oil, and even more closely to exploration companies’ capital expenditures. Investor presentations and earnings calls by upstream producers are essential reading for oilfield services equity research analysts. Because upstream producers budget their capital expenditures based on the oil price, oilfield services companies’ earnings should improve when upstream producers begin drilling.
Oil producers are drilling deeper wells, increasing the amount of proppant used per well. Meanwhile, gas production has been growing with fewer wells and more advanced technology. In order to meet these challenges, oilfield services companies need to invest in more advanced equipment. These services are increasingly needed as the demand for oil and gas continues to increase due to use of oilfield tools.
The global market for oilfield services is expected to continue to grow in the coming years, driven by increasing production output and cost reductions. The industry’s growth is also expected to be driven by shale gas extraction and demand for oil and gas in offshore areas. The forecast period is particularly promising for the industry, as more oil and gas companies begin experimenting with unconventional sources of energy.
Rising exploration activity and the increased investment in exploration in these regions will also drive demand for oilfield services.
The oilfield services market is split into three major segments: production, processing & separation, and geophysical services. Among these, the production segment is expected to hold the largest share of the market. Due to increased efforts to increase oil production, this segment is expected to grow at a faster pace than the other two by use of Multicycle sleeves.
Despite low oil prices, the market for oilfield services is still growing. The industry’s leaders are focusing on streamlining operations. In addition to providing technological solutions, oilfield services companies also provide critical support to operations. With their diverse experience in the industry, they have been able to help companies manage complex and complicated operations.
Oilfield services companies generally serve the oil and gas industry. This industry requires a range of activities ranging from logging and cementing to casing, perforating, and fracturing. These activities are the lifeblood of the oil and gas industry. The market is projected to grow at a CAGR of 8.3% from 2017 to 2022.
Oil prices continue to impact the profitability of OFS companies. Meanwhile, debt investors and Reserve Based Lending institutions are seeking less exposure to the upstream oil and gas sector. Furthermore, decarbonization trends are affecting all sectors, including the oil and gas industry. Check out this blog to get enlightened on this topic:https://en.wikipedia.org/wiki/Oil_well.