S&P lowers Forum Energy view to negative

S&P said it revised the outlook on Forum Energy Technologies Inc. to negative from stable and affirmed its B ratings and B senior unsecured debt ratings.

The company continues to face challenging market conditions, including erratic crude prices and restrained capital spending by the exploration and production industry, S&P said.

The strong equipment demand in the first nine months of 2018, especially for completions and pressure pumping equipment, led to an oversupply in 2019 as drilling activity ebbed, the agency said.

Forum Energy's financial measures remain weak for the current rating despite its significant cash flow generation and its reduction of the outstanding balance under its revolving credit facility, S&P said.

Like its industry peers, Forum faces a trifecta of headwinds, including an oversupply of equipment, elevated capital discipline of the exploration and production industry and the continued volatility of crude oil prices, the agency said.

Forum's exposure to the volatile North American market led to a weaker-than-expected financial performance, S&P said.

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