S&P downgrades Schlumberger credit rating, lowers Halliburton outlook

Schlumberger’s (NYSE:SLB) credit rating is lowered by a notch to A+ and rival Halliburton (NYSE:HAL) had its outlook lowered to Negative from Stable at S&P Global, as belt-tightening in the U.S. shale patch means less drilling and fracking work for top oilfield services providers.

“Oilfield services companies will no longer be able to generate the high operating margins they did in 2014,” writes S&P analyst Carin Dehne-Kiley.

S&P says the oilfield services industry has “fundamentally changed due to permanent efficiency and productivity gains realized by E&P companies as well as investor sentiment calling for E&P companies to live within cash flow and limit production growth.”

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