Two oil companies focused on the Permian Basin of West Texas are already planning to scale back their operations amid an oil war between Russia and Saudi Arabia that has caused commodity prices to crash.
Source: Houston Chronicle
In a pair of statements, Midland oil company Diamondback Energy and Austin oil company Parsley Energy confirmed plans to cut back the number of drilling rig and hydraulic fracturing crews in the shale play.
Ranked by drilling permits as the fourth most active driller in Texas during 2019, Diamondback typically has 20 drilling rigs in the field at any given time but now plans plans to remove two drilling rigs from service in April and a third during the second quarter. The company plans to reduce the number of hydraulic fracturing crews from nine to six.
Based on drilling permits filed, Parsley was ranked among the top 20 drillers in Texas during 2019. The company keeps 15 drilling rigs in the field but plans to reduce that number to 12 rigs. Parsley uses the services of five hydraulic fracturing crews but plans to reduce that number to three.
“The combination of a strong balance sheet and corporate agility is critical in these challenging and volatile times,” Parsley Energy CEO Matt Gallagher said in a statement. “We must act swiftly with an aim to preserve a stable free cash flow profile and remain committed to doing whatever is necessary to protect our balance sheet in the weeks and months ahead.”
