By David Wethe and Lynn Doan
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.
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.