UK oilfield services companies flowed lower on Wednesday after industry giant Schlumberger Ltd (NYSE:SLB) warned that the slowdown in North American fracking operations is deeper than it first thought.
The fracking market in the US and Canada has been under fire for a few months now, with oil prices plunging, pipelines maxed-out and exploration budgets exhausted.
Data analytics group Primary Vision estimates that the number of fracking crews at work in the Permian Basin in Texas has fallen 13% since June.
It was already forecast to weaken further over the holiday season and into the New Year, but Schlumberger said overnight it had seen a “larger drop in activity than expected”.
As a result, the Paris-based company warned investors that sales would drop by 15% in the fourth quarter compared with the third quarter.
Executive vice president Patrick Schorn did add that the market is expected to pick up again in the first half of 2019, but the bleak outlook still hit the shares of several London-listed oilfield service providers.
Pumping equipment specialist Weir Group PLC (LON:WEIR) fell 3.3% to 1,446p, well equipment provider Hunting PLC’s (LON:HTG) shares were down 3.4% to 548p, while power supplier Aggreko PLC (LON:AGK) dropped 1% to 740p.