in light of falling oil prices, Forbes asks, "Will there be more?"
|Halliburton‘s Lafayette manufacturing facility on Pont des Mouton Road, across from Northpark Technology Center.|
The Wall Street Journal is reporting that two of the country‘s biggest oilfield services companies, Halliburton and Baker Hughes, are in merger talks - a likely effort to contend with falling oil prices (even though many industry leaders believe the fall is temporary). Read the WSJ story (which requires a subscription) here.
The companies aren‘t commenting, but Forbes contributing writer Loren Steffy is already questioning whether this is part of new wave of consolidations:
While many industry observers have speculated that lower crude prices - U.S. benchmark crude dropped below $75 a barrel Thursday - could spark some consolidation, it‘s surprising that the wave of mergers is starting with two of the industry‘s biggest players.
The services side of the energy business has already undergone consolidation among some of the larger players, including Baker Hughes‘ $5.5 billion acquisition of BJ Services in 2010 and General Electric‘s $3.3 billion purchase of Lufkin Industries last year.
The next wave of deals was expected to come as smaller, more specialized service companies bought up others to augment the portfolio of equipment and services they sell. The U.S. onshore market, in particular, remains highly fragmented. A combined Halliburton and Baker Hughes, for example would control just 25 percent of the U.S. hydraulic fracturing market, the Journal reported.