A senior exec at fracking firm Weatherford International believes that there will only be around 20 fracking companies left by the end of the year. Of note, there were 61 fracking companies in the U.S. as of January 1, 2014, but oil prices dropping by close to 50% over the last 18 months has led to a wave of consolidation in the fracking industry and there are only 41 such firms right now.

50% Fracking Companies To Be Gone By Year-End:  Weatherford Exec

Statement from Weatherford exec on fracking industry

Rob Fulks, the pressure pumping marketing director at Weatherford, commented in an interview Wednesday at the IHS CERAWeek conference, that he believes there will only be around 20 companies (or 50%) left that provide hydraulic fracturing services when the dust settles. He pointed out that the demand for fracking (the controversial horizontal drilling method that led to a boom in U.S. oil and natural gas output) has dropped off dramatically as O&G firms leave wells unfinished because they are no longer economically viable.

The consolidation wave got underway with Halliburton buying Baker Hughes back in November last year for $34.6 billion, and then C&J Energy Services snapped up the pressure-pumping business of Nabors Industries not long after. There have been several other deals among smaller firms, and a few firms have simply ceased operations.

Weatherford International battening down the hatches

Weatherford is the fifth-largest fracking company in the U.S., but has been forced to cut costs “dramatically” given plummeting demand, Fulks noted. He also said the firm has been able to get price cuts from the mines that supply sand used to hold open cracks in the rocks so hydrocarbons can flow.

According to PacWest, a unit of IHS, O&G firms worldwide have cut $100 billion in spending over the last couple of quarters. Moreover, the prices for fracking are anticipated to drop by up to 35% by the end of 2015

Analysts note private-equity firms are researching the fracking industry for potential acquisitions, but the spread between buyer and seller pricing is still too wide for the time being.

Fulks would not divulge whether Weatherford was looking to acquire other fracking firms or their equipment, but he did note that most fracking equipment has a limited lifetime in storage.

Analysts at Sterne Agee notes:

The company continues to cut costs in an effort to effectively manage the downturn. WFT has completed 81% of the initial 8,000 headcount reduction plan and increased its headcount reduction target by 2,000 to 10,000 employees. The reduction in headcount achieved thus far is expected to yield annualized cost savings of $422 million ($0.40+ per share after tax). WFT also cut its 2015 capital expenditure target by $50 million to $850 million.