(Bloomberg) – Liberty Energy Inc., one of the biggest U.S. fracing companies, expects most producers to stick with their production plans as long as crude prices can hang on near current levels.
“If oil stayed in the low $60s, well, that’s not an exciting environment for us by any stretch of the imagination,” Liberty Chief Executive Officer Ron Gusek said during a call with analysts Thursday. “At most we probably feel modest ripples in activity levels.”
If US oil futures dip into the $50s, however, companies are apt to start dropping drilling rigs, Gusek said. But it was premature, he said, to forecast how much production would slow.
West Texas Intermediate rose 3% Thursday to $64.54 a barrel.
Liberty, formerly run by U.S. Energy Secretary Chris Wright, is the first large oil-service company to report earnings since crude prices began plunging in the wake of U.S. President Donald Trump’s trade war and OPEC’s decision to raise a planned production increase later this year. The rout has hammered oil companies’ share prices and threatened to undermine drillers’ plans to modestly increase U.S. production this year.
Denver-based Liberty has been among the hardest-hit companies, with its shares down about 20% since Trump announced the tariffs earlier this month. The stock surged as much as 13% Thursday after the company reported higher-than-expected first-quarter sales.
The company’s crews are currently working to hold production flat, Gusek said. Despite the recent volatility, he doesn’t expect oil and gas companies to make any sudden changes to their drilling plans.
“It’s unlikely that we’re going to have any of our customers remove a pad in the next month or two,” Gusek said. “It’s my expectation that to the extent we do see some changes, that’s going to be back half of the year.”