BKR - CFRA uses an innovation lens to find winners in changing oilfield services sector

Oilfield services companies rely on producer spending - and growth in that spending in particular - to boost their own profits, CFRA says, but upstream spending has been hard to come by in the pandemic era. "Oil and gas producers have been less willing to fork up extra cash to pursue growth projects, especially since COVID-19 caused a record decline in oil demand, and this has led to what the industry calls 'capital discipline,' ” the research firm says. And that's left oilfield services names fighting for new projects with little to no power in bargaining for better contracts: less pricing power, and declining profit margins in recent years. Producer spending fell by about 40% in 2015 and 2016 after the 2014 oil downturn, CFRA notes, before rebounding by some 20% in 2017 and 2018. The spending fell again in 2019 and 2020, by 15% and 48% respectively (the latter

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CFRA uses an innovation lens to find winners in changing oilfield services sector