Liberty Oilfield sees frac activity 'modestly ahead' of anticipated levels

(Reuters) - Liberty Oilfield Services on Wednesday said hydraulic fracturing activity was trending “modestly ahead” of anticipated levels and it expected roughly a 20% spike in its active fleets for the fourth quarter from the third quarter.

The company estimated roughly 130 fleets are running in the United States, below the number of fleets needed to hold U.S. oil production flat, chief executive Chris Wright told investors on a quarterly earnings call.

U.S. oil prices were down about 5.7% on Wednesday to $37.30 as surging coronavirus infections in the U.S. and Europe fanned concerns about new lockdowns and slowing economic activity.

“Commodity pricing drifting lower will impact activity,” warned Wright. He said that if oil prices remain in the high 30s or around current levels, the United States would see increased activity but a “significantly smaller increase than where we stand today.”

Shares of Liberty were down 12.6% to $6.82 on Wednesday, steeper than other declines across much of the energy sector.

“We thought Liberty’s quarter was strong,” said James West, a senior managing director with investment firm Evercore ISI, attributing Wednesday’s declines to overall weakness in the sector.

In a note to investors West called the results positive, pointing to a rebound in completion activity and Liberty’s entrance into the Haynesville shale which helped drive up third quarter revenue.

The company, which enacted its first-ever layoffs this year, said it no longer had any workers on furlough.

Reporting by Gary McWilliams; Editing by David Gregorio