- Debt levels at oilfield services companies have reached "unsustainable" levels without substantially higher cash flow, which will force many companies to cut expenses, Moody's says in a new report.
- "The beleaguered offshore (oil field services) segment is probably years away from rationalizing and fully recovering," the report reads. "More companies will likely restructure their balance sheets in 2019 and beyond, if their cash flow does not improve rapidly before their liquidity runs out."
- Moody's says "smaller, less diversified," services companies are most at risk for default, including Diamond Offshore (DO -4.3%), Hornbeck Offshore Services (HOS -8.9%), Transocean (RIG -3.8%) and Weatherford (WFT -23.7%), while larger services companies Halliburton (HAL -2.6%), Schlumberger (SLB -3.1%) and Baker Hughes (BHGE -3%) are seen as less at risk because of their global footprints and diverse list of operations.
- ETF: OIH
- Now read: Is Halliburton Headed Lower?
Original article