Royalty changes hit oilfield service providers hard – FINANCIAL NEWS-ecozik.com
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Royalty changes hit oilfield service providers hard

Oilfield services stocks are swooning over fears that the new royalty regime will further put the screws to one of the worst hit segments of the oilpatch.

Canadian oilfield services stocks swooned over fears Alberta government’s new royalty regime would erode margins for one of the worst hit segments from the oilpatch.

The structure, announced on Friday, is “one more aspect to worry about for oilfield services,” according Mark Westby, analyst at Calgary-based AltaCorp Capital Inc.

“In addition to significantly decreased oil prices resulting in lower activity and pricing pressure around the oilfield services space, the royalty framework will create an additional incentive to push down drilling and completion costs,” Westby said.

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