Yesterday oilfield services giant Baker Hughes (with a big presence in the Marcellus/Utica) released fourth quarter and full year 2015 results. There’s blood everywhere. Revenue for the year was $15.7 billion, down $8.8 billion compared to $24.6 billion for 2014, a 36% drop. Of course, average rig counts dropped 34% in 2015, so it’s no wonder revenues tanked–the service Baker Hughes provides was more than one-third less in demand. Looking at 4Q15 only, revenue for the quarter was $3.4 billion, down $3.2 billion (or 49%) compared to the fourth quarter of 2014. Ouch, there goes another arterial wound with blood pumping out on the floor. The good news, if there is any, is that the company kept expenses in check. According to Baker Hughes CEO Martin Craighead, “Despite this challenging environment, we generated $1.2 billion of free cash flow during the year, after more than $446 million of restructuring payments. This achievement was the result of our ongoing commitment to maintain capital discipline, as well as solid progress on initiatives to improve working capital.” As for the Halliburton shotgun wedding, Craighead said, “With regard to the merger, I continue to be extremely pleased with the efforts of our team supporting the regulatory review process and developing plans for a successful integration. We are fully dedicated to closing the merger as early as possible.” What’s ahead for 2016? “Looking ahead, we are forecasting rig activity worldwide to continue to decline throughout 2016. At current commodity prices, the global rig count could decline as much as 30% in 2016, as our customers’ challenges of maximizing production, lowering their overall costs, and protecting cash flows are now more acute.” Eeks, another bleeder. Below are select portions of yesterday’s bloody update…
