Liberty Oilfield expects price recovery in second quarter
By Rithika Krishna
Feb 5 (Reuters) - Liberty Oilfield Services Inc LBRT.N said on Friday it expects prices for shale fracking equipment and services to pick up in the second quarter, signaling improving activity after the COVID-19 pandemic forced oilfield services firms to offer steep discounts.
Demand for oilfield services has risen as producers resume work to clear the backlog after crude prices rose above breakeven levels needed to turn a profit.
U.S. crude prices CLc1 hit its highest in a year on Friday, closing in on $60 a barrel. O/R
Liberty, one of the top pressure pumping service providers in the United States, expects current frac activity levels to continue through the first half and gradually improve through the second.
"Pricing at this level was unsustainable outside of the period of crisis management," Chief Financial Officer Michael Stock said on an earnings call.
Liberty's comments echoed those of smaller rival Patterson-UTI Energy Inc PTEN.O, which on Thursday also reported a smaller-than-expected fourth-quarter loss on an uptick in demand.
"I think that as rig count continues to move up through 2021, there will be an opportunity to push pricing in pressure pumping later in the year," Patterson Chief Executive Officer William Hendricks said on an earnings call on Thursday.
Oilfield service companies last year cannibalized equipment parts and resorted to discarding or selling some old ones due to the pandemic-induced slump, shrinking supply in the market at a time when rig counts were on the rise.
The U.S. oil and gas rig count, an early indicator of future output, rose by eight to 392 in the week to Feb. 5, the highest since May, according to data from Baker Hughes. nL1N2K823L
(Reporting by Rithika Krishna in Bengaluru; Editing by Ramakrishnan M.)