The sharp decline in oil prices is weighing heavily on hydraulic fracturing companies that flourished at the height of the shale oil boom.
One of the latest casualties is Longview, Texas-based Pro-Stim Services, which did work for oil and gas producers in Texas and Louisiana, the Wall Street Journal reported.
Launched in 2011 with backing from private equity firm Turnbridge Capital LLC, the company survived its early years despite stiff competition.
A new company seemed to be entering the business every week, but oil prices continued to rise and the demand for fracking services was strong.
“The Haynesville Shale was blowing and going at that time,” Pro-Stim founder Bubba Brooks was quoted as saying.
But US crude prices plunged by 50 percent between last summer and the start of 2015, forcing the company to close shop earlier this year, the newspaper said.
Pro-Stim was not the only one. At least five frackers have filed for bankruptcy, suspended operations or closed their business altogether, according to consulting firm IHS Energy.
Analysts expected more companies to follow suit or merge amid the shrinking business.
Wells Fargo & Co. said as much as half of the available fracking capacity in the United States is sitting idle.
Even giant oil-field service companies such as Schlumberger Ltd. and Halliburton Co. are struggling amid low oil prices.
They have shed 55,000 workers worldwide during the current downturn.
And as big service companies slash their prices, small players are driven out of the market, the Journal said, citing analysts and industry experts.
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