US oilfield job losses could swell as natural gas prices plunge

Southwestern Energy Co

22/02/2024 17:59

By Georgina McCartney
       HOUSTON, Feb 22 (Reuters) - Oilfield service companies
and drillers have put the brakes on hiring and further job cuts
could loom as natural gas producers respond to sliding prices by
slashing spending on new wells to reduce excess production. 
    Already some 4,680 oilfield jobs have been lost since
December, according to data from trade group Energy Workforce &
Technology Council. It was the first decline in four months and
a reversal from the 7,700 jobs added in the same period last
year. 
    More staff cuts could be on the horizon. Natural gas firms
including Chesapeake Energy  CHK.N , Comstock Resources  CRK.N 
and Antero Resources  AR.N  have warned they were dropping rigs
and frack crews as ultra-low gas prices slammed profits.
    U.S. gas futures slumped this week to a 3-1/2-year low,
their weakest close since June 2020 when COVID-19 quashed
demand. They were trading at $1.67 per million British thermal
units on Thursday, down 6%. 
    Oilfield companies last year added jobs in all but two
months, and even those months with cuts were relatively small:
just 117 positions in July, and 271 in February, according to
the Energy Workforce. 
    “It's going to be an interesting year for the oilfield if
you don't have exposure to oil. For companies in the Haynesville
and Marcellus, it will get tough and people will lose their
jobs,” said Mark Marmo, CEO of oilfield firm Deep Well Services.
    
    
    In the latest wave of consolidation, hydraulic fracturing
company NexTier merged with rival Patterson-UTI in September,
and said this month it would close a facility in Mansfield,
Pennsylvania, affecting some 104 employees. 
    Patterson-UTI said the closure came because it had two
completion service facilities operating in that region, which
services the Marcellus gas field. 
    That company, which operates super-spec drilling rigs,
expects to be better insulated from a pullback in activity
because its high-end equipment sees strong demand, CEO Andy
Hendricks said in an interview.
        Chesapeake Energy, soon to be largest U.S. gas producer
with its pending acquisition of Southwestern Energy, is 
    cutting its
     drilling budget by 20% and dropping a rig and hydraulic
fracturing crew in both the Marcellus and Haynesville operating
areas. 
  
    The gas rig count in Haynesville has averaged 42 so far this
month, down sharply from 70 in the same period last year,
according to data from Baker Hughes. 
    Late last month, offshore rig operator Diamond Offshore
 DO.N  announced it would lay off 176 employees in Louisiana
starting next month after it permanently closed its West Auriga
rig in the Gulf of Mexico, according to a filing.
    Diamond offshore had been managing operations at the Auriga
rig on behalf of its subsidiary Seadrill Limited since May 2021,
said Kevin Bordosky, Diamond's senior director of investor
relations and management of the rig will return to Seadrill
following the rig's current contracts. 
        He reiterated that all Diamond Offshore employees on the
Auriga will be impacted.
  

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Oilfield employment contracts after strong 2023    https://reut.rs/3I9594n
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 (Reporting by Georgina McCartney in Houston; Editing by Liz
Hampton and David Gregorio)
 ((Georgina.McCartney@thomsonreuters.com;))