In this week's news update, the rig count takes another dip, and Schlumberger reduces its staff again after a fourth-quarter loss
On the heels of disclosing a $1 billion loss for the final quarter of 2015 and customers abruptly cancelling projects, oilfields services company Schlumberger plans to cut 10,000 jobs from its current staff of 95,000.
The latest wave of cuts means Schlumberger has cut 34,000 employees, or 26 percent of its original workforce, since November 2014.
Chief executive Paal Kibsgaard said in the company’s earnings report that a “significant” recovery in oilfield activity was not expected until 2017, and he indicated that the company might struggle to meet analysts’ estimates for its current-quarter profit.
Large Gas Producer Cutting Back
The third-largest independent natural gas producer in the U.S. plans to cut 1,100 jobs and has stopped its drilling program as Appalachian wells remain unprofitable amid a pipeline bottleneck in the Marcellus Shale and a warm winter cutting into demand.
Southwestern Energy Co.’s move to cut 40 percent of its workforce comes months after gas prices fell below break-even levels in the Marcellus. Gas prices have fallen 27 percent in the past year.
The company expects a $60 to $70 million pretax charge for severance payments and other costs. Of the 1,100 job cuts, 300 are located at the company’s Houston headquarters.
Rig Count Down 13
The number of rigs exploring for oil and natural gas in the U.S. declined by 13 last week to 637, according to oilfield services company Baker Hughes.
The Houston-based company says 510 rigs were seeking oil last week and 127 for natural gas. A year ago, 1,633 rigs were active.
Texas declined by seven rigs, while Pennsylvania was down three. Kansas, New Mexico and North Dakota each dropped two and California was down one.
Alaska increased by two rigs and Ohio was up one. Arkansas, Colorado, Louisiana, Oklahoma, Utah, West Virginia and Wyoming were all unchanged.
The U.S. rig count peaked at 4,530 in 1981 and bottomed at 488 in 1999.