N. American oil service firms' pricing and hiring on the upswing

Ensign Energy Services

17/06/2021 10:00

By Liz Hampton
    DENVER, June 17 (Reuters) - As oil climbs above $70 a barrel
for the first time in almost three years, oilfield firms are
reporting prices for their services and equipment have bottomed
and many are fielding more calls for jobs.  
    U.S. crude production, which plummeted during the
coronavirus pandemic, is ticking back up, despite generally flat
spending by oil and gas producers. U.S. shale output is expected
to rise by 38,000 barrels per day next month, halting earlier
drops.  urn:newsml:reuters.com:*:nL2N2NW1NN
    Companies report drilling and well completions activity and
pricing are edging higher, especially for those with specialized
services or more productive equipment. Roughnecks also say they
are seeing an increase in job offers, with companies competing
for skilled workers.      
    "We are already beginning to see a positive increase in
activity and an upturn in service pricing will hopefully be
reflected in the coming months," said Stuart Wilson, chief
executive of service firm Packers Plus Energy Services. 
    Still, there is a long way to go. The pandemic hammered the
industry last year as some were just regaining their pricing
power, Wilson said. His company is seeing strong demand for its
premium completions equipment for oil and gas wells. 
    
    OPTIMISM REBOUNDS  
    "Operators appear to be a lot more optimistic and
considering projects that have lay dormant the previous year,"
he said. "We are seeing more orders being confirmed at pricing
levels that are more comparable to pre-pandemic levels," he
added.
    Providers of advanced drilling rigs, tubular goods and
chemicals are gingerly pushing up invoices, according to
analysts and market participants. 
    Pricing power is returning "especially in niches like
high-spec onshore drilling rigs," said Josh Young, chief
investment officer of energy investor Bison Interests. There has
been a $1,000 per day increase in dayrates for such U.S. rigs
with more to come, he said. 
    Ensign Energy Services  ESI.TO  forecasts a $2,000 to $3,000
per day increase in rig dayrates in Canada into the autumn as
supply and demand tightens, the company said at an RBC Capital
Markets conference this month. In the United States, the second
quarter will be the bottom for cash margins, the company said.  
  
    JOB FAIRS RETURN
    The shift is evident in employment with firms hiring again.
Oilfield workers are reporting job offers from employers
including Schlumberger  SLB.N  and Halliburton  HAL.N . 
    Liberty Oilfield Services  LBRT.N  this month held a job
fair in Henderson, Colorado. It also is hiring wireline
operators in Texas, Louisiana, Oklahoma, Wyoming and West
Virginia, according to LinkedIn. 
    U.S. oilfield jobs increased in May by 1.6%, or about 9,700
positions, according to trade group Energy Workforce &
Technology Council (Council). Some 27,000 oilfield jobs have
been regained since February. 
    To break out of the downturn, service firms need higher
pricing to help meet environmental and sustainability goals,
according to Leslie Shockley Beyer, of the Council. 
    "Their margins have to be healthy enough to re-invest,"
Beyer said. 

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Oilfield Employment Bounces Back    https://graphics.reuters.com/USA-OIL/ENERGY/qmyvmzrlmpr/
Oilfield Employment Bounces Back    https://tmsnrt.rs/3gtMlzC
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 (Reporting by Liz Hampton
Editing by Marguerita Choy)
 ((Liz.Hampton@thomsonreuters.com; +1 713 210 8522; Reuters
Messaging: Reuters Messaging: liz.hampton.reuters@reuters.net))