Las Vegas-based First Titan says market for used oil field equipment will be huge when industry turns around
First Titan Corp. believes it has found a lucrative new source of future revenues and is pursuing opportunities in a market some are abandoning: oil field services.
Oversupply and falling demand have the oil and gas industry mired in a slump. Oil field service firms have been caught in a vise of too much debt and not enough work to go around as exploration and production companies cut budgets.
“The current price slump has opened a substantial window of opportunity to obtain good equipment at tremendous, previously unimaginable discounts,” said First Titan CEO Sydney Jim in a press release.
“The oil and gas industry will recover, and when it does, companies that have taken advantage of these once-in-a-generation opportunities can reap windfalls if they plan and act accordingly.”
This has resulted in industry-wide asset auctions where valuable, often pristine equipment, can be purchased for a fraction of its true cost, says Kim.
“We’re looking at buying oil field service equipment, refurbishing it, and when the market does recover, selling it at a significant markup as drilling ramps up again,” Kim said.
“Such a plan holds the promise of solid revenues when the market upturns.”
Auction houses are reporting record turnouts for oil field equipment sales, indicating there is a viable market of companies wanting to put such items to immediate use.
Studies also forecast the market for oil field equipment will top $127 billion by 2020, showing the demand will remain strong.