More than half of U.S. oil field services companies and 40 percent of independent upstream producers see shale development and production as a crucial component of their business, contributing the majority of their revenue in 2014. That's according to a new survey, jointly released by UHY LLP Certified Public Accountants and Oil & Gas Financial Journal.
The poll found that the number of companies seeing shale as their top revenue driver has increased by 15 percent over the past 12 months. In addition, over 40 percent of U.S. oil producers and their equipment providers intend to spend the greater part of their budgets on shale in 2014. By contrast, a significant proportion of midstream and downstream businesses, such as pipeline operators and refiners, estimate that shale accounts for less than a quarter of their revenues.
The poll included 178 companies related to the oil and gas industry, with combined revenues of about $700 billion. Results from the survey indicate that the bulk of producers and services firms concentrate their operations in the most prolific plays, including the Eagle Ford Shale in South Texas, the Permian Basin in West Texas and the Marcellus Shale in Pennsylvania. In total, more than two in three oil field services firms and almost half of the producers are active in the Eagle Ford.
When asked to identify the main challenges they face, oil and gas producers cited low commodity prices as a major obstacle, while oil field services firms said high drilling and completion costs are their biggest hurdles.