Top U.S. oilfield services provider Halliburton Co. said March 17 it will furlough about 3,500 employees in Houston for 60 days as shale producers slash spending amid falling oil prices.
The affected staff will alternate working one-week on and one-week off during the two-month period. While they will keep their benefits during the furlough, workers will not be paid for the weeks not at work, a spokeswoman said.
U.S. shale producers this month cut between 25% and 50% of planned spending as falling demand from coronavirus and a price war between Saudi Arabia and Russia threw the market into a tailspin. U.S. oil prices are down more than 50% this year to about $26 a barrel, from $61 a barrel in December.
Smaller companies that provide equipment and drilling services to oil producers have been hard-hit by the downturn. Directional driller Payzone Directional Services this week disclosed it would halt operations. Liberty Oilfield Services Inc., another Denver-based oilfield firm, last week said its executives would take a 20% pay cut.
"We believe moving to this schedule will allow us to best manage costs and provide full benefits to our employees during this difficult market," Halliburton spokeswoman Emily Mir said in a statement.
Halliburton, the largest provider of hydraulic fracturing services in the U.S., has about 30% of the pressure pumping market share, according to consultancy Primary Vision.
The Houston, Texas-based company's stock has fallen around 70% in the past four weeks, to $6.14. The firm already took a series of aggressive cost-cutting measures last year due to flat oil prices and slowing producer spending, including multiple rounds of job cuts and idling equipment.
EOG Resources said it started to restore curtailed production in June as oil prices recovered from their April lows, and it expects nearly all shut-in wells to begin production before the third quarter ends.
Excluding items, Marathon Oil posted a loss of 60 cents per share, smaller than analysts' estimate of 63 cents per share, according to Refinitiv IBES, while Parsley Energy posted a surprise profit.
Continental Resources, which shut 70% of its oil output when prices and fuel demand collapsed, said U.S. production growth will stay moderate unless oil reaches $50-$60/bbl.