Bastard got out and took a cushy Deep State job just in time to escape Trump’s “Golden Era”.
The oil company founded by Energy Secretary Chris Wright reported falling profits Thursday, warning investors that the oil industry faces “storm clouds on the horizon” amid President Donald Trump’s tariff blitz.
Liberty Energy is a barometer of the health of America’s oil patch. The Denver-based company provides fracking services to oil and gas companies, and it is of growing importance today — as the company was founded by Wright and is one of the first oil firms to report its first quarter earnings amid the president’s push to impose tariffs on a broad-range of imported goods.
“As we look forward, of course, there are some storm clouds on the horizon,” Liberty CEO Ron Gusek told financial analysts. “We don’t know if that storm is going to roll in here or not.”
Liberty executives sought to put a good face on the moment. They noted the oil and gas industry is a cyclical business and that drillers are in better shape to withstand a downturn than in previous years. They predicted drilling activity would pick up in the second quarter, as winter turned to spring. And they expressed hope that Trump’s decision to pause a wide range of tariffs had relieved pressure on the global economy.
But the tone was a far cry from the “golden era of American energy dominance” that Wright promised shortly after becoming Energy secretary earlier this year.
Liberty’s quarterly profit of $165 million represented its worst quarter since the first three months of 2022 and was down from almost $239 million in the same quarter last year. Liberty’s stock has fallen around 40 percent since the start of year.
If oil prices fall another few dollars per barrel, the industry is going to shrink, one of the country’s largest fracking-services firms said this week. Liberty Energy, which was founded by U.S. Secretary of Energy Chris Wright, told investors that recent oil prices in the low-$60s are “not an exciting environment for us by any stretch of the imagination.”
And if they fall into the $50s, then the industry could see a significant contraction.
“I would certainly expect a pullback in rig count,” said Liberty CEO Ron Gusek on the company’s earnings call Thursday.
West Texas Intermediate crude, the U.S. benchmark, has mostly been trading in the low-$60s in recent days, down from the $70s at the start of the year. On Thursday, it rose 3.5% to $64.68 per barrel.
If prices settle in the low-$60s, Gusek expects that smaller drillers will probably cut back some of their rigs, denting production growth but causing only “modest ripples” in the broader market. A sustained drop into the $50s would force a more significant reckoning. WTI briefly traded in the $50s earlier this month.
Gusek thinks that declines would not be as severe as past boom-and-bust cycles, but the company will continue to focus on strengthening its balance sheet in the months ahead in case the market takes a turn lower.
Gusek said tariffs and an OPEC policy to add more oil production to the market are the two main reasons prices have been weak. Trump’s decision to pause some tariffs helped boost oil prices somewhat over the past week, but Gusek said that the industry is still on guard for further declines. Most analysts expect the industry to be oversupplied for most of the rest of the year.
Liberty’s results reflect one of the tensions in Trump’s energy policy: “Drill Baby Drill” only works when oil prices are high enough to justify it.
Liberty stock rose on Thursday, but the gains still left shares down 42% this year.
Wright, the energy secretary, founded Denver-based Liberty in 2011. He stepped down from his roles as chairman and CEO in February when he was confirmed to his position.
When he was confirmed, Wright owned 1.6% of Liberty’s stock, according to the company’s latest proxy statement. Wright told the company he would divest all his ownership in accordance with federal ethics rules, the proxy statement added. A company representative said on Friday that Wright no longer owns stock or options in Liberty.
Might be a good time for people working technical jobs in the oil biz here to start maybe looking at joining one of the geothermal companies that are using fracking techniques, or companies finding re-use for geological data besides just looking for fossilized carbon. Because the Wall Street Journal is reporting that the oil companies are turning IBM on their technology staff:
“Big Oil Is Offshoring Its Prized Engineering Jobs to India
Chevron, BP, others moving work to the country, where engineers are paid salaries about a third or fourth of U.S. counterparts’”
*sniff*
Somebody find me a hanky, please….