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Wednesday, February 11, 2015

Oil and Gas Producers Ask Suppliers for Price Cuts

From the Pittsburgh Business Times:
Pressured by low commodity prices, oil and gas producers in the Marcellus Shale have begun asking for discounts of at least 10 percent on the price of goods and services. 
Although oil prices have begun to rise slightly, they remain below $50 per barrel. Natural gas prices are no better, hanging at under $3 per million British thermal units. While there are exceptions, producers have been paring their 2015 capital spending plans, cutting down on the projects they undertake in southwestern Pennsylvania and in other shale regions. 
Deep Well Services, based in Zelienople, has heard from all of its producer customers in the past three weeks, each requesting reductions. 
"It's getting tough," Deep Well Services CEO Mark Marmo said. "It's going to be a challenging year."
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