By David Wethe and Lynn Doan

Mar 18, 2020

(Bloomberg) Halliburton Co., the world’s biggest provider of fracking services, will furlough about 3,500 workers at its Houston headquarters as crude prices plunged to an 18-year low.The mandatory time-off will last as long as 60 days, Halliburton said in an emailed statement. Employees will work one-week-on, one-week-off schedules — and without pay during off weeks — as the oilfield-services company tries to cut costs in a “difficult market.” Benefits, including health insurance, won’t be interrupted.Halliburton is the latest oil giant to scale back as drillers around the world face the worst oil market crash in a generation. Parsley Energy Inc. announced a 40% spending cut while ConocoPhillips disclosed plans to trim outlays on drilling and buybacks by $2.2 billion. The hired hands of the oil patch like Halliburton are expected to see customer spending on new wells and fracking to drop significantly from prior expectations, according to Tudor, Pickering, Holt & Co.

Drilling and fracking orders “could fall off a cliff” during the second half of this year, analysts at the Houston boutique energy bank wrote last week in a note to investors.

America’s shale patch, which a combination of hydraulic fracturing and horizontal drilling unleashed a decade ago, has been especially hard-hit by a price war between low-cost producers Russia and Saudi Arabia and a demand hit from the global coronavirus crisis. Explorers in the Permian Basin of Texas and New Mexico, the largest U.S. shale play, need oil above $47 a barrel to break even, according to BloombergNEF analysis.

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Halliburton fell 7.2% to $5.70 at 9:50 a.m. in New York trading, after earlier dipping as much as 10%. The shares have lost 77% of their value this year.

Exxon Mobil Corp. vowed earlier this week to “significantly” cut capital spending. Chevron Corp. is also reviewing options to rein in expenditures, while BP Plc may slash spending by as much 20% this year.

U.S. benchmark West Texas Intermediate crude fell below $24 a barrel to the lowest since June 2002 on Wednesday.