Potential Impact of Exxon/XTO Deal

As frequently happens with these kinds of business deals, there will be changes. Some will view these as advantageous, others will view changes as losses. Will it be the "smaller local guys" that are reorganized out of business this time?

http://www.rigzone.com/news/article.asp?a_id=84363

from the article ...
"While scores of service companies can help develop these fields, Exxon is likely to turn to the most experienced and biggest providers of oilfield services that can provide bundled development packages, said Bill Herbert, an analyst with Simmons & Co.

Herbert said that XTO's stable of 15 contract drillers would likely be cut in half by Exxon.

"They are not going to deal with as many contractors and will have more exacting standards," Herbert said."

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Permalink Reply by intrepid on January 3, 2010 at 16:36
So maybe the smaller guy's will wind up being more competitive for other operators?
Permalink Reply by sesport on January 3, 2010 at 18:22
Yes, I imagine they could. IMO, in order to do that, and in the current economic situation, they will have to do some cost cutting to be competitive. I think that one strategy MAY be to cut employees. Then again, another strategy MAY be to examine the opportunities opening up globally. Just saying ... there's always a downside & an upside.

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