Halliburton Co. is ready to hire more than 200 people in the Permian Basin for “all of its product service lines and support functions,” a spokeswoman confirmed Friday, further evidence that the oil and natural gas industry is gearing up for better days following a two-year slump.
Despite the plunge in activity across North America since late 2014, the Permian has remained a go-to-basin in the United States, as exploration and production (E&P) companies have continued to pour resources into the legacy drilling area of West Texas and southern New Mexico.
U.S. upstream transactions in 2016 nearly doubled following a seven-year low in 2015, triggered by a surge of Permian Basin activity, according to 1Derrick. Transactions in the Permian as of mid-December had accounted for almost $26 billion in value, with more than $20 billion alone since the end of June. The Permian also represented 10 of the 20 largest deals.
Halliburton stands to benefit from increased E&P activity as it is the most active pressure pumper in North America. Spokeswoman Emily Mir told NGI’s Shale Daily that the Houston-based oilfield services (OFS) giant is hiring for Permian operations based in Odessa and Brownfield, TX, and in Artesia, NM. Staff positions are opening for, among other things, artificial lift, baroid, cementing, completion tools, drillbits/service, multi-chemical, production enhancement, supply chain management, testing/subsea and wireline/perforating.
“We’re hiring in other areas,” Mir said. However, she is unsure how many other people may be needed for E&P support in other locations.
According to a survey issued Thursday of E&P executives by the Federal Reserve Bank of Dallas (Fed), which covers Texas, business activity improved in the final three months of the year. The Fed’s business activity index, the survey’s broadest measure of conditions facing Eleventh District energy firms, rose to 40.1 from 3Q2016’s 26.7 reading.
“Several indicators expanded on a quarterly basis for the first time in 2016, including employment and production,” the Dallas office said. “Outlooks also improved, despite some skepticism about recent oil producer agreements,” including the agreement by the Organization of the Petroleum Exporting Countries to reduce output through at least May.
The survey of E&P executives working in Texas found that production stopped declining in the final three months.
“The oil production index surged nearly 20 points to 9.0, and the natural gas production index was 3.1, up from minus 20.6 last quarter,” the survey said. For OFS firms, “the equipment utilization index rose again, posting at 35.9. The index of prices received for services jumped from minus 23.4 to 6.8, its first positive reading in 2016.”
Oil and gas labor market conditions “turned positive for the first time all year, although the majority of respondents continued to report unchanged headcounts,” according to the survey. “The employment index came in at 3.4, with 18% of firms noting net hiring and 15% noting net layoffs. Indexes of wages and benefits and of employee hours also turned positive at 10.3 and 13.7, respectively.”
However, “price pressure” for the OFS sector is increasing, E&P executives told the Fed. The index rose to 13.1 from minus 3.6 in the third quarter. E&P companies reported lease operating expenses had risen, with the index up to 14.0 from minus 15.9.
The six-month outlooks also “improved markedly,” according to the survey. “The company outlook index shot up 38 points to 57.1. Capital expenditures rose at a faster quarter-over-quarter pace, as did E&P firms’ expectations of 2017 capital spending.”
The survey respondents also are more bullish about oil prices, but they are mixed about natural gas prices. While 71% see higher oil prices a year from now, only 50% expect to see stronger gas prices.
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