Kirby downbeat on pressure pumping services
OREANDA-NEWS. April 29, 2016. Diesel engine service company Kirby is not expecting improvement in its business serving the land-based hydraulic fracturing industry for the rest of 2016, citing continued cuts by oil field services companies and little sign of recovery in US upstream activity.
"The market has simply been far worse for longer than I think anyone in the market anticipated," Kirby chief executive David Grzebinski said in the company's first quarter earnings conference call today.
Kirby received no orders for new or remanufactured pressure pumping units during the first quarter, and demand for parts used by customers to service their equipment plunged as they chose instead to cannibalize existing equipment.
The bright side is that massive maintenance deferrals mean that pent-up demand could be unleashed upon the return of land-based fracturing activity, which Kirby expects to start with completion of many wells that have been drilled but not fractured.
"It is not a question of if the market comes back, but it is a question of when," Grzebinski said.
The diesel services segment also dealt with weakness in the Gulf of Mexico offshore diesel engine markets in the first quarter. The diesel services side of Kirby has reduced its employee count by about 600 workers from 950, the company said.