RE: Asking for a price break- It happening for suppliers to the oil patch. I'll be watching for smaller oil consolidations. I jumped a little to early on REXX & MCF. I still will hold.
RPC Warns That Oil Companies Demand Lower Costs BY GILLIAN RICH, INVESTOR'S BUSINESS DAILY
RPC Inc. (NYSE: RES) warned Wednesday that oil company customers are seeking lower prices for its oilfield services as production operations get scaled back in the wake of falling oil prices.
"Customers planning to continue exploration and production activities in 2015 are seeking service cost reductions to offset the declines in their projected production revenues," said CEO Richard Hubbell in a release. "These factors will definitely have a negative impact on our 2015 financial results."
Meanwhile, other oilfield service companies are pulling back. Baker Hughes (NYSE: BHI) is laying off 11% of it workforce, roughly 7,000 employees. Schlumberger (NYSE: SLB) slashed its capital budget and said it would cut 9,000 jobs.
It comes as producers like Matador Resources (NYSE: MTDR), Concho Resources (NYSE: CXO) and Chevron (NYSE: CVX) have scaled back on operations in recent months.
Despite the plunge in crude, RPC said Q4 EPS jumped 111.8% to 36 cents. Analysts polled by Thomson Reuters were expecting 32 cents. Revenue was up 39% to $632.2 million, but fell short of views for $636.7 million.
The average domestic rig count during the quarter rose 8.9% to 1,914 vs. a year ago.
Cenovus Energy (NYSE: CVE), a Canadian exploration and production company, said it would cut its 2015 capital spending by an additional $700 million to $1.8 billion to $2 billion.
In December, Cenovus announced a 2015 capital spending budget of $2.5 billion to $2.7 billion, a 15% reduction from 2014 levels.
"I believe crude oil prices will rebound, but the timing is uncertain. We're taking the actions we deem prudent to help protect the financial resilience of Cenovus without compromising our future," said CEO Brian Ferguson in the release.
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