Nextier Oilfield expects fracking demand to recover next year (updated)

Nextier Oilfield Solutions

26/07/2023 18:19

(Adds CEO comments in paragraphs 3-4, financial details and
stock price)
    By Arathy Somasekhar
       HOUSTON, July 26 (Reuters) - Nextier Oilfield Solutions
 NEX.N  said on Wednesday it expects fracking demand to recover
next year, but that a shortage of equipment could hinder growth
in U.S. oil and gas production. 
    Weaker oil and gas prices forced U.S. shale producers to cut
drilling and well completions activity in the April-June
quarter, hurting demand for equipment and services. 
    Nextier said it expects fracking activity to bottom out
later this year after dipping briefly from current levels. 
    "We view the current slowdown in industry activity as
transitory, and by 2024, we see a path for U.S. land completion
activity to recover to levels that we saw in the first quarter
of this year," Chief Executive Officer Robert Drummond said.
    However, insufficient new build in fracking equipment to
keep pace with the recovery in demand could be the bottleneck to
U.S. oil and gas production growth by next year, he added.
    The company said it would take stack, or put aside, its
equipment rather than cut pricing if demand falls in the near
term, adding it could cut up to three fracking fleets by the end
of the third quarter. 
    Nextier, which is in the process of merging with
Patterson-UTI Energy  PTEN.O , on Tuesday reported
better-than-expected earnings of 68 cents per share for the
quarter ended June 30.
    The upbeat outlook and profit beat for the second quarter
helped the company's shares rise as much as 1.6% to $11.69 on
Wednesday, its highest level in over a year. 

 (Reporting by Arathy Somasekhar in Houston
Editing by Matthew Lewis)
 ((arathy.s@thomsonreuters.com; +1 832 610 7346; Twitter:
@ArathySom;))