Market Outlook and Future Growth Drivers in Natural Gas and International Markets
Natural gas activity in the U.S. is expected to recover further, supported by LNG exports and increased rig count in gas basins.
The international markets, especially in the Middle East, are poised for growth with new rig awards and deployment schedules.
The company remains cautiously optimistic about stabilization in the U.S. oil market and potential upticks in gas drilling, which could positively impact future revenues.
Impact of Infrastructure Challenges on Production and Mitigation Strategies
Natural gas processing issues in New Mexico caused well shut-ins and deferred oil production, but the impact on revenue was minimal as oil revenue is the primary driver.
Disruptions are timing issues rather than well performance problems, presenting opportunities for midstream and power projects aimed at improving flow assurance.
The company is advancing midstream and power generation projects, including compressor station expansions, to mitigate future infrastructure constraints and support stable production.
Resilience of Offshore and International Markets Amid Geopolitical Instability
Oil States highlighted the resilience of offshore and international markets despite geopolitical instability, lower crude oil prices, and fluctuating U.S. trade policies.
The company achieved the midpoint of its EBITDA guidance due to strong product and service mix, driven by offshore activity and backlog growth.
Management emphasized that offshore project visibility is high, with projects being multi-year and multi-decade developments, less impacted by short-term macroeconomic issues.
Market Volatility and Macro Uncertainty Impacting Oil and Gas Activity
Oil prices fluctuated between mid-$50s and mid-$70s per barrel due to trade policy fears, OPEC+ production signals, and geopolitical risks, creating market volatility.
Customer drilling and completion activity remains cautious, with expectations of potential negative impacts on U.S. oil production and natural gas demand, especially as LNG facilities come online.
Management emphasizes the unsettled macro environment and its influence on customer behavior and industry activity levels.
Dafinchi