For some time we’ve told you that drillers in the Marcellus/Utica, as well as other shale plays, have been hammering oilfield services companies on price. Oilfield services companies are companies like Sclumberger (largest such company in the world) and Halliburton (second largest in the world) and Baker Hughes (fifth largest in the world, being gobbled up by Halliburton later this year). Oilfield services companies provide much of the equipment, personnel, chemicals and other supplies to do the actual drilling and fracking of shale wells. They’re the contract workers, hired to do a job. Last December MDN was hearing that oilfield services companies were being forced to discount prices by as much as 20% (see Marcellus Oilfield Services Cos Being Forced to Discount). By February, when it was obvious the price downturn would last for an extended period of time, MDN picked up on Magnum Hunter’s comments that they were getting prices discounted by as much as 40% (see Magnum Hunter Slashes Drilling Budget by 75% for 2015). In addition to slashing prices, oilfield services companies, in an attempt to stay in business, are innovating in two other ways: (1) they’ve become bankers, allowing drillers to buy their services on credit, and (2) refracking existing wells with “tiny rubber-coated balls”…
