Superior Energy Falls as U.S. Fracking Costs Grow

(Corrects description of company in first paragraph.)

Superior Energy Services Inc. (SPN), which is trying to buy a provider of hydraulic-fracturing services in North America, fell the most in more than two months as more of its contracting peers report additional costs associated with moving from natural gas to oil basins in the U.S. and Canada.

Superior, based in New Orleans, dropped 6.1 percent to close at $25.78 in New York, the biggest decline since Nov. 9.

Carbo Ceramics Inc. (CRR), the largest provider of manufactured materials for the technique used to extract oil and gas from shale, said in an earnings statement today that fourth-quarter costs increased because of its shift to oil basins. Gas producers such as Chesapeake Energy Corp. and EQT Corp. have announced they’re curtailing production because of low prices.

“Superior seems to be taking its lumps,” Trey Stolz, an analyst at Iberia Capital Partners in New Orleans, who rates the shares “outperform” and owns none, said in an interview. “The momentum is snowballing on this North American logistics issue with the Carbo earnings release today.”

Halliburton Co. (HAL) and Baker Hughes Inc. (BHI), two of the three largest fracking service providers, reported similar costs earlier this week for moving crews into North American oil basins.

There isn’t a lack of total demand for fracking work, James C. West, an analyst at Barclays Capital in New York, said today in a telephone interview.

“People want to frack wells,” he said. “The transitory period here is just negatively impacting everybody’s results.”

Superior said Oct. 10 it agreed to buy Houston-based Complete Production Services Inc. (CPX) Complete had about 315,000 horsepower in fracking equipment for North America as of June 30, the companies said at the time. The deal is awaiting final approval.

To contact the reporter on this story: David Wethe in Houston at dwethe@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.