Oil & Gas Support Services
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 8,000 oil and gas service companies provide a variety of support activities to oil and gas operations on a contract or fee basis. Services support the exploration, drilling, testing, and clean-up operations for on-shore or off-shore oil and gas wells.
Dependence On Petroleum Demand
During periods of slow or negative economic growth, demand for petroleum products falls, resulting in fewer capital projects by the oil and gas industry.
New Environmental Regulations
Adoption of new federal or state laws limiting the use of specific technologies and services, such as hydraulic fracturing, vapor extraction processes (VPX), and cyclic steam stimulation (CSS) could make it more difficult and expensive to obtain petroleum products from unconventional sources.
Industry size & Structure
A typical oil and gas services company has 28 employees and annual revenues of $8-9 million.
- About 8,000 firms employ 227,000 workers and generate $68 billion in annual revenue by providing support activities for oil and gas operations in the US.
- About 82% of firms employ fewer than 20 workers, accounting for 11% of industry revenues. Almost 5% of firms have over 100 employees and earn 64% of industry revenues.
- Large service firms include Halliburton Company, SLB (formerly Schlumberger Ltd), Weatherford International, Baker Hughes, and Weatherford.
- Nearly half (48.1%) of all oilfield services firms in the US are located in Texas and Oklahoma, with 5,144 and 1,631 establishments, respectively.
Industry Forecast
Oil & Gas Support Services Industry Growth
Recent Developments
Jan 27, 2025 - Producer Prices Easing
- Producer prices for oil and gas support services fell 1.3% in December compared to a year ago after rising by 4% in the previous December-versus-December annual comparison, according to the latest US Bureau of Labor Statistics data. Industry producer prices have eased somewhat from last summer's record highs that were driven by record production and falling prices for crude oil and natural gas. Employment by oil and gas support services declined 1.1% year over year in November, while the average industry wage climbed 7.4% over the same period to $34.35 per hour, BLS data show. Sales for the US oil and gas support services industry are forecast to grow at a 7.09% compounded annual rate from 2024 to 2028, faster than the growth of the overall economy, according to the Interindustry Economic Research Fund.
- On his first day in office President Trump declared a national energy emergency to maximize oil and gas production, speed permitting, roll back environmental protections, and withdraw the US from the 2015 Paris climate deal. But with US production at record levels, it remains to be seen if Trump’s actions will have any impact. Still, the mood in the oil and gas industry – a major customer for oil and gas support services – is optimistic, according to The American Oil & Gas Reporter. “It borders on exuberant,” described Karr Ingham, president of Texas Alliance of Energy Producers. The American Petroleum Institute, has a roadmap for the second Trump administration that includes swiftly authorizing liquified natural gas exports, expanding drilling on federal lands, making pipeline permitting easier, repealing strict vehicle emissions and fuel economy standards, and keeping current corporate tax rates in place.
- Oil and gas service providers say producers are becoming more cautious about spending, The Wall Street Journal reported in October. In its third quarter earnings call, oil-field services giant SLB (formerly Schlumberger) reported slightly worse-than-expected results, which its CEO blamed on its customers taking a more cautious approach to spending. Looking ahead to 2025, SLB said international upstream spending could grow by a low to middle single-digit percentage, while spending in North America is expected to remain flat or decline slightly. “From where we were a year ago, there’s definitely a reduced expectation of spending growth,” Roger Read, an equity analyst at Wells Fargo, was quoted in WSJ as saying. Falling oil prices – down about 5% year to date and 20% over the past 12 months – weaker demand from China, and slower economic growth in the US and Europe are causing producers to pump the brakes on production.
- A falling rig count, consolidation in the energy sector, and weak natural gas prices are sapping demand for oil field services in the nation's oil patch, The Wall Street Journal reports. According to data from Baker Hughes, the oil and gas rig count in North America has been steadily declining since peaking in late 2022 and remains below pre-pandemic levels. In July, oil field giant Halliburton reported its rig count in the region declined 12% in Q2 compared with a year earlier and that its revenue in the region fell 8%, the fourth consecutive quarter of decline. Similarly, rival SLB’s revenue in North America dropped 6%, according to WSJ. Haliburton and SLB are faring better abroad, with international revenue up 8% and 18% year over year, respectively. Halliburton’s CEO told WSJ he thinks activity in North America should pick up in 2025 after producers digest their acquisitions.
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