Shale will be top revenue driver for most oil field services firms in 2014


HOUSTON – Oil and natural gas locked in U.S. shale rock will account for most of the revenue flowing to more than half of oil field services firms and 40 percent of independent producers this year, a global survey found this week.

UHY LLP and Oil & Gas Financial Journal said Monday the number of oil field services firms and upstream companies that pointed to shale as their top revenue driver grew by 15 percent over last year. And more than 40 percent of U.S. oil producers and their equipment providers are planning to spend the bulk of their annual budgets this year on shale.

Meanwhile, pipeline operators and refiners say shale makes up less than a quarter of their top-line sales. Overall, the survey shows that small and mid-sized independent producers are driving shale production, UHY Principal Bill Penczak said in a written statement.

“Their plans for continuing investment, moderate price expectations and realistic appraisals of the challenges facing shale development reflected in this survey bode well for shale’s future,” Penczak said.

Researcher: 2014 slated to be most active year for global shale drilling

The survey, which had 178 respondent companies worth a combined $700 billion in revenue, showed that the Eagle Ford Shale in South Texas, the Permian Basin in West Texas and the Marcellus Shale in Pennsylvania garnered the most activity from producers and service firms. Almost 70 percent of the surveyed oil field services firm and nearly half of the producers said they were active in the Eagle Ford.

Oil field service firms were more spread out among the shale plays than the producers. The equipment providers said they were active in an average of 4.8 shale plays, while operators said they operated in an average 2.3 shale plays. Oil and gas producers said low commodity prices were the biggest challenge operating in the shale plays, while oil field services firms ranked high drilling and completion cost as the most difficult challenge, the survey showed.

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Collin Eaton

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