Fort Worth oilfield service company FTS International had a full calendar for its hydraulic fracturing crews two weeks ago but is now furloughing employees as crude oil prices continue to fall and exploration and production companies continue to slash their budgets.
Source: Houston Chronicle
In a Monday afternoon statement, the company confirmed that it is furloughing crews no longer scheduled to work and related support staff. But the cuts are not limited to the field.
FTS International executives are taking a 25 percent pay cut on top of a 15 percent cut that was already in place for 2020. Rolling furloughs, salary reductions and lower hourly rates will be applied to non-executive and manufacturing staff while bonuses and travel time pay have been cut.
“Just over two weeks ago, our business was growing and we had a full frac calendar,” FTS International CEO Michael Doss said. “However, in response to current conditions, many of our customers have already dropped fleets or will be dropping fleets over the next couple of months. Pressure pumping companies, like FTSI, are also giving price concessions that are expected to significantly reduce margins across the industry. Accordingly, we have initiated aggressive measures to reduce costs and position us for future success.”
FTS International made the announcement at a time when many exploration and production companies are cutting their drilling budgets in response to rapidly falling oil prices, affecting spending that goes to oilfield service companies.
A showdown between Russia and Saudi Arabia has created a global supply glut while the coronavirus outbreak has lowered global demand. West Texas Intermediate crude oil closed trading at $23.36 per barrel on Wednesday afternoon, a price not seen since March 2002.
Founded in 2000 and headquartered in Fort Worth, FTS International has 1,250 employees who focus on hydraulic fracturing work in shale plays across the United States. The company posted a $73 million loss on $777 million of revenue in 2019.
