A fracking rig in Colorado.

Due to oil companies cutting their spending drastically, over 50% of the United States fracking companies will be sold or will go under by the end of the current year, said an executive Weatherford International PLC. Out of 41 fracking companies only 20 of the companies that offer hydraulic fracturing services may survive, said Weatherford’s pressure pumping marketing director Rob Fulks during an interview at the IHS CERAWeek conference in Houston on Wednesday. Because of the low oil prices companies are leaving oil wells uncompleted and the demand for fracking has declined greatly.

Fulks didn’t want to say if Weatherford is looking to buy unused equipment from other fracking companies or acquire the whole business. “We pass by and all we see are closed doors and unused equipment,” said Fulks. “It is not good for equipment to lay around, no matter if it’s a car, airplane or a frack pump.”

The United States was the biggest market for fracking at the start of last year with over 61 fracking companies, but now the crisis will reduce the number severely. The bigger players in the game hoped for consolidation when Halliburton had announced in November that they planned to buy Baker Hughes Inc. for 34.6 billion dollars. Many companies also saw a way out when C&J Energy Services stated that they plan on buying the pressure pumping business from Nabors Industries. Weatherford, which operates the fifth largest fracking business in the United States has been forced to make dramatic cost cuts because of the low customer demand, said Fulks. They have managed to negotiate certain cost cuts from the mines that supply them with sand. The sand is used to make openings or cracks in the rocks which later on make hydrocarbons flow. Oil companies have been forced to reduce their spending by 100 billion dollars globally due to the falling prices.

Although many large private companies are looking forward to buying certain fracking companies the gap between the sellers price and the buyers price is still too big at the moment, said Alex Robart who is a principal at PacWest during an interview at CERAWeek.