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Baker Hughes (BKR) Expects Drop in North America Drilling Spend
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Baker Hughes Company (BKR - Free Report) projected a decrease in drilling and well completion spending in North America for 2024.
The forecast comes amid ongoing volatility in commodity prices, significantly impacting the industry’s dynamics.
Lorenzo Simonelli, the CEO of Baker Hughes, expressed that there is a continued lack of momentum in North American activity. He anticipates no substantial improvement in activity during the initial half of 2024. This indicates the company’s cautious stance in response to the growing unpredictability of the market.
The reduction in expenditure is not limited to the prominent U.S. oilfield technology firm Baker Hughes alone. Shale producers are cutting back on drilling activities due to declining prices. Numerous U.S. oil producers are presently sustaining production at levels sufficient to maintain stability, with a newfound focus on maximizing returns for investors rather than pursuing traditional production growth.
EOG Resources Inc. (EOG - Free Report) , one of the most significant independent shale producers, expects U.S. crude production growth to be less than half of what was observed in 2023, given the decline in domestic drilling activity. The company does not plan to increase activity in its core regions this year but may consider expanding drilling in its emerging Utica Shale fields, spanning Ohio, West Virginia and Pennsylvania.
Regarding numerical projections, Baker Hughes foresees a reduction in spending by low to mid-single digits in North America for 2024. This stands in contrast to the outlook of Halliburton Company (HAL - Free Report) , a competing company with a more substantial presence in the North America market, which expressed expectations of consistent activity levels in the continent.
The financial outlook for Baker Hughes also reflects broader industry challenges. The company anticipates revenues of $6.10-$6.60 billion for first-quarter 2024. This forecast falls short of analysts’ expectations, which were pegged at $6.51 billion, according to data from the London Stock Exchange Group. The projected shortfall is attributed to a seasonal decline in international revenues and a slow start on U.S. land.
Internationally, Baker Hughes has revised its oilfield spending growth projections for 2024. The company expects high-single-digit growth, a reduction from its earlier forecast of low-double-digit growth. This adjustment underscores the global impacts of fluctuating commodity prices and shifting market dynamics.
Baker Hughes’ projections for 2024 paint a picture of an oil industry grappling with uncertainty and changing market forces. As commodity prices remain volatile and shale producers adapt their strategies, firms like Baker Hughes are recalibrating their expectations and bracing for a year of cautious navigation through a challenging economic landscape.
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Baker Hughes (BKR) Expects Drop in North America Drilling Spend
Baker Hughes Company (BKR - Free Report) projected a decrease in drilling and well completion spending in North America for 2024.
The forecast comes amid ongoing volatility in commodity prices, significantly impacting the industry’s dynamics.
Lorenzo Simonelli, the CEO of Baker Hughes, expressed that there is a continued lack of momentum in North American activity. He anticipates no substantial improvement in activity during the initial half of 2024. This indicates the company’s cautious stance in response to the growing unpredictability of the market.
The reduction in expenditure is not limited to the prominent U.S. oilfield technology firm Baker Hughes alone. Shale producers are cutting back on drilling activities due to declining prices. Numerous U.S. oil producers are presently sustaining production at levels sufficient to maintain stability, with a newfound focus on maximizing returns for investors rather than pursuing traditional production growth.
EOG Resources Inc. (EOG - Free Report) , one of the most significant independent shale producers, expects U.S. crude production growth to be less than half of what was observed in 2023, given the decline in domestic drilling activity. The company does not plan to increase activity in its core regions this year but may consider expanding drilling in its emerging Utica Shale fields, spanning Ohio, West Virginia and Pennsylvania.
Regarding numerical projections, Baker Hughes foresees a reduction in spending by low to mid-single digits in North America for 2024. This stands in contrast to the outlook of Halliburton Company (HAL - Free Report) , a competing company with a more substantial presence in the North America market, which expressed expectations of consistent activity levels in the continent.
The financial outlook for Baker Hughes also reflects broader industry challenges. The company anticipates revenues of $6.10-$6.60 billion for first-quarter 2024. This forecast falls short of analysts’ expectations, which were pegged at $6.51 billion, according to data from the London Stock Exchange Group. The projected shortfall is attributed to a seasonal decline in international revenues and a slow start on U.S. land.
Internationally, Baker Hughes has revised its oilfield spending growth projections for 2024. The company expects high-single-digit growth, a reduction from its earlier forecast of low-double-digit growth. This adjustment underscores the global impacts of fluctuating commodity prices and shifting market dynamics.
Baker Hughes’ projections for 2024 paint a picture of an oil industry grappling with uncertainty and changing market forces. As commodity prices remain volatile and shale producers adapt their strategies, firms like Baker Hughes are recalibrating their expectations and bracing for a year of cautious navigation through a challenging economic landscape.