Latest news with #TravisStice
Yahoo
21-05-2025
- Business
- Yahoo
Citi Downgrades Pattersion-UTI (PTEN)
The stock of Patterson-UTI Energy, Inc. (NASDAQ:PTEN) has recently been downgraded by analysts at Citi. Let's shed some light on the development. A drilling site in the wilds of nature, highlighting the company's commitment to exploration. Patterson-UTI Energy, Inc. (NASDAQ:PTEN) is a leading provider of drilling and completion services to oil and natural gas exploration and production companies in the United States and other select countries. On May 19, 2025, Citi analyst Scott Gruber downgraded the stock from Buy to Neutral, reducing its price target from $8 to $6.5. The revised outlook comes as a result of a tough macroeconomic environment for the oilfield services industry, primarily due to a plunge in crude oil prices and the resultant decline in drilling activity. The tariffs on steel and aluminum have raised costs for the industry, which is already anticipated to struggle with a decline in rig counts and day rates, along with shrinking margins and free cash flow. Citi forecasts a 9% decrease in active rig count for Q3 compared to Q1, equating to a reduction of nine rigs for Patterson-UTI Energy. Moreover, the analyst anticipates a 10% decline in day rates as existing contracts expire. However, it must be noted that these issues are not specific to Patterson-UTI Energy, Inc. (NASDAQ:PTEN), but are affecting the oilfield services industry as a whole. The low oil prices, coupled with a projected slowdown in demand, have forced many oil majors to reduce capital expenditure and decline drilling activity. Travis Stice, chairman and CEO of Diamondback Energy, recently stated: 'We believe we are at a tipping point for U.S. oil production at current commodity prices. As a result of these activity cuts, it is likely that U.S. onshore oil production has peaked and will begin to decline this quarter. This will have a meaningful impact on our industry and our country" That said, Patterson-UTI Energy, Inc. (NASDAQ:PTEN) reported a steady performance in the first quarter of 2025, beating estimates in both earnings and revenue. The company also returned $51 million to shareholders, including $20 million in share repurchases. While we acknowledge the potential of PTEN to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than PTEN and that has 100x upside potential, check out our report about this cheapest AI stock. READ NEXT: 10 Cheap Energy Stocks to Buy Now and 10 Most Undervalued Energy Stocks According to Hedge Funds. Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNN
12-05-2025
- Business
- CNN
So much for ‘drill, baby, drill'?
America's oil industry is facing immense pressure during Trump 2.0. Even though President Donald Trump vowed to usher in a period of American energy dominance, the administration's trade war and OPEC's production hikes have cast a shadow over the oil patch. In fact, once-gangbusters US oil production growth is now at risk of grinding to a halt — or even going in reverse. Hurt by weakening demand and depressed prices, US oil output is now expected to shrink in 2026, S&P Global Commodity Insights projected on Monday. S&P estimates that US oil production will dip to 13.3 million barrels per day in 2026, a 130,000-barrel decline from its 2025 forecast. It would be just the second time in the past decade that US production fell. The only other time was during the Covid-19 crash, when the world economy ground to a halt and oil prices briefly dropped below zero. 'The US shale oil sector is quite gloomy. They're battening down the hatches for a storm,' said Bob McNally, president of consulting firm Rapidan Energy Group. Diamondback Energy told shareholders last week that US onshore oil production has likely peaked and will start to drop due to plunging prices. 'We believe we are at a tipping point for US oil production at current commodity prices,' Diamondback CEO Travis Stice said in a shareholder letter. Of course, the silver lining for American consumers is that prices at the pump are very much under control. In fact, some analysts expect gas prices will trend even lower in the coming months, an outcome that could help offset potential sticker shock caused by the trade war. Sky-high tariffs have caused recession fears that have driven oil prices lower. Crude has also been hit by a surprisingly large increase in production from OPEC and its allies. Trump has repeatedly called for OPEC to ramp up supply, in part to drive down inflation and pile pressure on Russia to end the war in Ukraine. The ironic part of the gloom and doom in oil country is that Trump's 2024 campaign was backed enthusiastically by the fossil fuels industry, and the president vowed to send oil production skyrocketing. McNally, a former White House energy advisor to President George W. Bush, told CNN on Friday that the oil industry 'dodged a bullet' because a Trump loss would have meant tougher regulation and less leasing of federal lands and waters. But cutting red tape and green-lighting permits can't make up for plunging prices in the short term. 'While the long-term outlook from regulatory and cost perspective is improving vastly over what it would have been had Trump lost,' McNally said, 'the president's priority for lower oil prices is hurting the industry. That's just true.' Even though the United States is the world's biggest oil producer, it's also most sensitive to price drops. US crude plunged 20% between Trump's tariff announcement on 'Liberation Day' (April 2) and May 5, when it fell to a four-year low of $57.13 a barrel. Crude has bounced back above $60 but remains at or below the level many drillers require to make money. In late March, oil executives surveyed by the Federal Reserve Bank of Dallas expressed alarm about the trade war. 'The administration's chaos is a disaster for the commodity markets,' one exploration and production executive said. ''Drill, baby, drill' is nothing short of a myth and populist rallying cry. Tariff policy is impossible for us to predict and doesn't have a clear goal. We want more stability.' McNally expects US oil prices to plunge into the low- to mid-$40s from late summer and into the fall, causing production growth to grind to a halt. He said if prices fall even further, US oil production 'could easily' drop in 2026. 'It's certainly on the table,' McNally said. S&P executives warned on Monday that 'extreme uncertainty about the future of US trade' and a looming supply surplus are expected to 'hobble' US oil production later this year and next. The firm sharply cut its global oil demand growth outlook for 2025 from 1.25 million barrels per day before the April 2 tariff announcement to 750,000 barrels per day now. 'The Trump administration is creating a regulatory environment that can facilitate oil and gas activity,' said Jim Burkhard, vice president and global head of crude oil research at S&P Global Commodity Insights. 'But ultimately, it is the level of oil prices that is the biggest factor in driving US production up or down.' Cheap oil and weakening production could ultimately cost jobs in the oil patch or even cause financial stress for drillers. In 2020, when oil prices plunged and production crashed, the oil industry experienced a spike in bankruptcies and layoffs. However, the oil industry looks more resilient today because of a wave of consolidation in which Big Oil companies with powerful balance sheets gobbled up smaller players. In any case, the trouble in the oil world is a windfall for many consumers filling up their gas tanks. The national average price for regular gas fell to $3.15 a barrel on Friday, according to AAA. That's down sharply from $3.64 a gallon at this point last year and a far cry from the June 2022 record high of $5.02 a gallon. Cheaper gas prices could help offset potential tariff-driven price increases elsewhere. And they have helped lower the US inflation rate. Veteran oil analyst Tom Kloza expects gas prices will continue to move lower. 'It's going to be a cheap summer,' Kloza said.
CNN
12-05-2025
- Business
- CNN
So much for ‘drill, baby, drill'?
America's oil industry is facing immense pressure during Trump 2.0. Even though President Donald Trump vowed to usher in a period of American energy dominance, the administration's trade war and OPEC's production hikes have cast a shadow over the oil patch. In fact, once-gangbusters US oil production growth is now at risk of grinding to a halt — or even going in reverse. Hurt by weakening demand and depressed prices, US oil output is now expected to shrink in 2026, S&P Global Commodity Insights projected on Monday. S&P estimates that US oil production will dip to 13.3 million barrels per day in 2026, a 130,000-barrel decline from its 2025 forecast. It would be just the second time in the past decade that US production fell. The only other time was during the Covid-19 crash, when the world economy ground to a halt and oil prices briefly dropped below zero. 'The US shale oil sector is quite gloomy. They're battening down the hatches for a storm,' said Bob McNally, president of consulting firm Rapidan Energy Group. Diamondback Energy told shareholders last week that US onshore oil production has likely peaked and will start to drop due to plunging prices. 'We believe we are at a tipping point for US oil production at current commodity prices,' Diamondback CEO Travis Stice said in a shareholder letter. Of course, the silver lining for American consumers is that prices at the pump are very much under control. In fact, some analysts expect gas prices will trend even lower in the coming months, an outcome that could help offset potential sticker shock caused by the trade war. Sky-high tariffs have caused recession fears that have driven oil prices lower. Crude has also been hit by a surprisingly large increase in production from OPEC and its allies. Trump has repeatedly called for OPEC to ramp up supply, in part to drive down inflation and pile pressure on Russia to end the war in Ukraine. The ironic part of the gloom and doom in oil country is that Trump's 2024 campaign was backed enthusiastically by the fossil fuels industry, and the president vowed to send oil production skyrocketing. McNally, a former White House energy advisor to President George W. Bush, told CNN on Friday that the oil industry 'dodged a bullet' because a Trump loss would have meant tougher regulation and less leasing of federal lands and waters. But cutting red tape and green-lighting permits can't make up for plunging prices in the short term. 'While the long-term outlook from regulatory and cost perspective is improving vastly over what it would have been had Trump lost,' McNally said, 'the president's priority for lower oil prices is hurting the industry. That's just true.' Even though the United States is the world's biggest oil producer, it's also most sensitive to price drops. US crude plunged 20% between Trump's tariff announcement on 'Liberation Day' (April 2) and May 5, when it fell to a four-year low of $57.13 a barrel. Crude has bounced back above $60 but remains at or below the level many drillers require to make money. In late March, oil executives surveyed by the Federal Reserve Bank of Dallas expressed alarm about the trade war. 'The administration's chaos is a disaster for the commodity markets,' one exploration and production executive said. ''Drill, baby, drill' is nothing short of a myth and populist rallying cry. Tariff policy is impossible for us to predict and doesn't have a clear goal. We want more stability.' McNally expects US oil prices to plunge into the low- to mid-$40s from late summer and into the fall, causing production growth to grind to a halt. He said if prices fall even further, US oil production 'could easily' drop in 2026. 'It's certainly on the table,' McNally said. S&P executives warned on Monday that 'extreme uncertainty about the future of US trade' and a looming supply surplus are expected to 'hobble' US oil production later this year and next. The firm sharply cut its global oil demand growth outlook for 2025 from 1.25 million barrels per day before the April 2 tariff announcement to 750,000 barrels per day now. 'The Trump administration is creating a regulatory environment that can facilitate oil and gas activity,' said Jim Burkhard, vice president and global head of crude oil research at S&P Global Commodity Insights. 'But ultimately, it is the level of oil prices that is the biggest factor in driving US production up or down.' Cheap oil and weakening production could ultimately cost jobs in the oil patch or even cause financial stress for drillers. In 2020, when oil prices plunged and production crashed, the oil industry experienced a spike in bankruptcies and layoffs. However, the oil industry looks more resilient today because of a wave of consolidation in which Big Oil companies with powerful balance sheets gobbled up smaller players. In any case, the trouble in the oil world is a windfall for many consumers filling up their gas tanks. The national average price for regular gas fell to $3.15 a barrel on Friday, according to AAA. That's down sharply from $3.64 a gallon at this point last year and a far cry from the June 2022 record high of $5.02 a gallon. Cheaper gas prices could help offset potential tariff-driven price increases elsewhere. And they have helped lower the US inflation rate. Veteran oil analyst Tom Kloza expects gas prices will continue to move lower. 'It's going to be a cheap summer,' Kloza said.
E&E News
09-05-2025
- Business
- E&E News
Has US oil production peaked? CEO reopens debate.
'Drill, baby, drill' has hit peak oil. Oil and gas leaders have been saying for a while that oil production in the United States could be headed for a plateau — in a few years. Maybe it would start declining in the early 2030s. Not many industry executives have been willing to use the word 'peak,' much less say that the peak was happening — even as oil prices steadily sank. Advertisement But Travis Stice, the chair and CEO of Texas-based Diamondback Energy, said that part out loud this week. With fewer rigs and crews in the field, he told investors he sees output going down for the first time in a long time. It is 'likely that U.S. onshore oil production has peaked and will begin to decline this quarter,' Stice said in a letter to investors released Monday. 'This will have a meaningful impact on our industry and our country.' 'Peak' is a strong word in the oil business. It brings back talk about the once widely held concept that the world was running out of oil. That view was largely put to rest in the 2010s when U.S. producers used advances in hydraulic fracturing to tap sources of oil previously considered too difficult and expensive to exploit. That led directly to the United States going from a net importer to the world's top producer. But that rise seems to be ending, if slowly. The shale business was maturing even before talk of tariffs started raising concerns about the U.S. economy and driving up the cost of steel. And geology has stopped cooperating. Many of the best sites for drilling have been tapped and it's getting more expensive to get significant amounts of new oil out of the tight shale formations that fueled the country's extended boom. Now those tariff worries, economic uncertainty and talk of a global oil surplus are weighing on the closely watched price of oil. The benchmark U.S. crude spot price was $58.50 a barrel on Monday, according to the U.S. Energy Information Administration. That marked a drop of about $20 from the week before President Donald Trump took office in January. On Thursday, oil futures in New York were trading at about $60 a barrel. The oil price is at depths rarely seen in the past 20 years, Stice said, and the U.S. oil business is at 'a tipping point.' Travis Stice is the CEO of Diamondback Energy. | iStock/Diamondback Energy It's an ironic time for the boom to peak. Trump is enacting what might the most pro-oil agenda since the rise of the environmental movement, ripping protective regulations out by the roots and pushing new fossil fuel projects, sometimes with more fervor than the industry itself. But that isn't putting more drill bits in the ground. Diamondback said it is dropping three rigs and a completion crew at least until fall. Other big players are pulling back, too. On Thursday, Houston-based ConocoPhillips said it was lowering its capital spending plans for the year. In a good sign for Trump, gasoline prices have remained relatively low. The U.S. average price for a gallon of regular gasoline was $3.152, AAA reported Thursday — nearly 49 cents cheaper than a year earlier. But experts say the drop is largely tied to economic uncertainty, not increased drilling. The Trump administration says its efforts, in the long term, will both lower prices and let businesses prosper. 'While prices are going to move up and down in the short term, the Trump administration is focused on changing policies, changing the investment climate for businesses in this country, all big wins for the American people and why the President was elected in the first place,' Department of Energy spokesperson Ben Dietderich said in an email. Nicole Schomburg, a senior director at FTI Consulting, which works with many of the oil and gas companies that drove the shale boom, says the U.S. industry is better prepared now than it was for recent price dives in 2014 and 2020. 'People have claimed we're going to see peak oil or that the 'shale bubble' will burst for years. But that hasn't happened,' Schomburg said in an email exchange, 'and one of the big reasons why is because the world has continued to demand more oil than many 'experts' thought.' But as the leader of a top independent producer in the country's dominant Permian Basin oil play, Stice's words carry some weight. And the geological 'headwinds,' he said, are starting to outweigh the 'tailwinds' the industry had enjoyed from technological advances and finding new efficiencies. The head of Occidental Petroleum is also using what might be called 'the p-word,' if a bit less strongly. In an earnings call Thursday, CEO Vicki Hollub said the company had expected a peak in U.S. production sometime between 2027 and 2030, but the growing economic uncertainty means 'it's looking like peak could come sooner.' Trump's outreach to the oil barons always had a contradiction at its heart. 'Drill, baby, drill' sounds great at a rally. But it doesn't necessarily go over as well in a boardroom where company leaders want demand to go up along with prices. Oil executives worried during the 2024 presidential campaign about the prospect of a trade war that could dampen the economy and cool demand. Still, backing Trump was an easy call for many oil executives even as oil production hit world records under then-President Joe Biden. Trump wooed them with promises of deregulation, and they showered him with millions of dollars to fuel his return to power. And the president has delivered on deregulation with an avalanche of executive orders dismantling Biden's agenda aiming at reining in the effects of climate change. As welcome as those orders may be for oil producers, they can't make up for the lower demand caused by the forces that Stice recounted to his investors — global economic worries and a looming boost in supply from OPEC+ producers around the world. Diamondback estimates that the number of fracking crews is down 20 percent in the Permian this year. That means it's down about 15 percent across the country, said Stice, who later this month is set to give up his CEO title and become executive chair of the company he's run as chief executive since 2012. The oil rig count, he said, will likely be down 10 percent by the end of June and still headed downward. Tariffs are starting to bite as well. At Diamondback, Stice said, they have driven up the cost of casing more than 10 percent. For his company, that adds up to nearly $40 million annually. Still, he isn't saying drilling is going to stop. Stice said in his letter that Diamondback would produce 480,000 to 495,000 barrels of oil a day this year, down slightly from an earlier estimate. 'To use a driving analogy, we are taking our foot off the accelerator as we approach a red light,' Stice said in his letter. 'If the light turns green before we get to the stoplight, we will hit the gas again, but we are also prepared to brake if needed.' A green light, he explained during an earnings call this week, means an oil price of $65 to $70 per barrel. That's about $5 to $10 higher than benchmark U.S. oil futures were trading Thursday. Reporter Shelby Webb contributed.
Yahoo
07-05-2025
- Business
- Yahoo
A top CEO declared the U.S. oil industry has ‘peaked'
A record-breaking but maturing U.S. oil industry has 'peaked' and already begun its decline as it struggles under the weight of tariffs and lower oil prices, the CEO of the Permian Basin's top pure-play producer said. Crude oil prices have fallen this week to new four-year lows since the pandemic amid recession fears and unexpected production hikes from OPEC nations and their allies. As a global slowdown spreads throughout every industry, U.S. oil producers are quickly pivoting to drop drilling rigs and cut costs with prices now below the levels for profitability, including key Texas Permian producers Diamondback Energy and Coterra Energy, both of which held their earnings calls May 6. 'We believe we are at a tipping point for U.S. oil production at current commodity prices,' Diamondback chairman and CEO Travis Stice said in a needle-moving shareholder letter prior to the call. 'As a result of these activity cuts, it is likely that U.S. onshore oil production has peaked and will begin to decline this quarter. 'This will have a meaningful impact on our industry and our country,' Stice added. As the global economy goes, so to does oil demand. Diamondback, the largest oil producer focused only on the Permian, has grown into a key bellwether for the industry. Stice's warning was, in effect, a wake-up call to anyone in the industry yet to heed what was already underway. The company said it will reduce its drilling rig count by three and cut one of its well completions, or fracking, crews. Diamondback lowered its 2025 midpoint capital expenditure guidance by $400 million down to $3.6 billion, although oil volumes are only expected to fall by 1% because of efficiency gains. Steel tariffs have increased downhole well costs by more than 10% and contribute to the declining activity levels, Stice said. 'We're a little over 100 days into this new administration and, 'Good Lord.'' Coterra chairman and CEO Tom Jorden said it is likely 'tied together' as certain OPEC nations led by Saudi Arabia, and their allies announced a second straight unexpected hike in their production quotas on May 3—at a time when President Trump wants lower oil prices to push gasoline costs down. 'We're a little over 100 days into this new administration and, 'Good Lord,'' Jorden said in the May 6 earnings call. 'There's been a tremendous amount of volatility introduced, whether we're talking about the oil markets or tariffs and our relations around the world. All of these converge on forecasts for oil price. The president is trying to do a lot of difficult things up front, and the White House is in a hurry. We have some sympathy for that sense of urgency.'
