Helmerich & Payne Might Struggle Next Year, but There’s a Silver Lining
NEW YORK (TheStreet) -- The U.S. land-based, or onshore, rig market could struggle next year as oil producers clamp down on their drilling budgets, impacting the growth of contract drillers such as Helmerich & Payne
But this could be an opportunity for the Tulsa, Okla.-based driller to expand its lead as the largest player in the U.S. land market in terms of market share, thanks to its fleet of modern high-specification rigs.
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According to latest data from Baker Hughes
The price of the benchmark American crude would average around $70 to $75 a barrel in 2015, says last week's report by Goldman Sachs. That's as opposed to the first nine months of 2014, when oil remained north of $90 a barrel.
In anticipation of lower crude prices, some exploration and production companies, such as ConocoPhillips
Eventually, capital spending by energy companies on North American onshore fields will drop by 6% in 2015, Singer predicted.
The number of U.S. well drilling permits approved has already dropped by 37% in November as compared to October, with between 28% and 38% decline in permits approved for Texas's Eagle Ford and Permian Basin and North Dakota's Bakken shale formation.
A decline in drilling permits usually translates into a lower number of drilling rigs in the next two to three months.
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