AN ONGOING slide in oil prices has impacted producers, explorers and is putting services companies under pressure.

Speaking with Oil and Gas Australia, RBS Morgan’s analyst Alexandra Clarke said companies have been trying to transition their workforce and their equipment to be able to service government clients as a way of maintaining a strong balance sheet.

“There have been a lot of layoffs. We have noticed the contractors or consultants who offer optimisation skills are doing better than their construction counterparts,” Ms Clarke said.

“Companies that can go onto a brownfield site and tweak a few things for a low [operating expenditure] number and improve the output from a project will be called upon, leaving contractors who specialise on greenfield developments with limited work,” she said.

Many explorers are working towards optimising existing operations to shield themselves from the impact of low oil prices, resulting in a need for services companies providing optimisation skills in the sector.

Many share prices are down around 50 per cent with producing juniors uniquely exposed – as falling oil prices were reducing the working lives of their oil reserves,according to Credit Suisse oil and gas analyst Martin Kronborg.

Speaking with Oil and Gas Australia, Mr Kronborg said in terms of the stock market, Woodside and Oil Search have come out on top with strong balance sheets and low cost projects driving their success.

AWE and Beach Energy have also performed well, the key differentiator being their domestic gas focus which is only partially affected by short-term oil price moves, Mr Kronborg said.

A strong performance from Woodside was noted, although the impact of the declining price of oil is apparent in the ongoing delays of Woodside’s Browse project.

“Woodside’s Browse project has been pushed back and we would not expect this to progress any time soon,” Mr Kronborg said.

“Nothing already in the construction phase has been impacted so far, nor would we expect it to be in Australia – at least for the major projects,” he said.

Revised expenditure and delaying of projects has been a common trend over the past six months as the price of oil continues to fall, although unlike many explorers and producers in North America, most Australian based oil and gas companies are looking relatively strong.

“The good days are certainly over at these crude price levels, [however] there is no real stress yet,” Mr Kronborg said.

With oil prices declining daily companies are finding it difficult to fix a [capital expenditure] target.

Mr Kronborg said Santos announced a budget in November which two weeks later needed to be revised due to a further fall in oil prices, junior explorers in joint ventures with Santos are still awaiting clarification of Santos’ cuts and how it impact their expenditure.

Increased hedging to avoid market fluctuations was noted by analysts as a trend over the past six months.

Mr Kronborg said trying to cut costs on a three to six month period is a challenge for companies, as contractors have been hired and rigs leased.

Ms Clarke said cost cutting and finding new work to cover the overheads and debt repayments are needed for services companies to keep their balance sheet looking strong throughout 2015.

“I see limited growth for the sector, if any,” she said.