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Fracking Discounts Seen Cutting Profits At Oil Service Companies By $3B-plus

Oilfield contractors hired to drill wells and fracture rock will have to lower prices by as much as 20%, analysts say, which could cut more than $3B from the 2015 earnings that had been expected for the likes of Schlumberger (NYSE:SLB), Halliburton (NYSE:HAL), Baker Hughes (NYSE:BHI) and Weatherford International (NYSE:WFT).

Oil producers will be pushing for discounts wherever they can find them, and may begin to take shape as early as this month, with fracking services perhaps seeing the biggest chunk of pricing discounts because it is the largest part of the cost of drilling a new well.

Earnings estimates for oil service companies that have been cut since last week will continue to be revised lower, says Credit Suisse's James Wicklund: “We’ve just gotten started.”