Insights

Parsley Energy Grows Drilling Inventory 73% with Permian Acquisition

Parsley Energy (NYSE: PE) announced in its Q1’17 earnings call that it had closed the acquisition of about 71,000 acres and associated assets in the Permian Basin from Double Eagle Energy Permian LLC. The acquisition — which spans Dawson, Andrews, Martin, Howard, Midland, Glasscock, Upton, and Reagan Counties — increases Parsley’s total leasehold in the Permian to about 230,000 net acres and grows its net drilling inventory (in terms of locations in priority target zones) by 73 percent:Source: Parsley Energy...

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Mammoth Reports Growth in Pressure Pumping, Frac Sand Production, Directional Drilling

On May 3, 2017, Mammoth Energy Service, Inc. (NASDAQ: TUSK) hosted its quarterly earnings call to report results from Q1’17. Highlights included a dramatic increase in YOY pressure pumping activity, progress on two key frac sand production facility acquisitions, and growth in the company’s directional drilling fleets.Mammoth reported Q1 spending of about $31 million, most of which is tied to delivery of 75,000 HHP and associated equipment ordered in November 2016. Other factors includeAcquisition of three high-pressure fleets totaling...

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Is History Repeating in the US Pressure Pumping Market?

Since 2012, the percantage of horizontal rigs running in the Permian Basin has steadily increased. The percent of horizontal rigs in the Permian grew from 14% in January 2013 to 27% in January 2015. Now, the Permian accounts for over 42% of the active horizontal rigs in the US land market.This year the Permian gained 100 horizontal rigs, a 46% increase in horizontally directed rigs. The year-over-year horizontal rig increase is a staggering 174% for the prolific basin. At this...

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Schlumberger-Weatherford JV Could Challenge Halliburton

On March 24, 2017, Weatherford and Schlumberger announced a proposed joint venture to deliver completions products and services for the development of unconventional plays in the United States and Canada. Going by the name OneStim, the venture will boast one of the largest hydraulic fracturing fleets in the industry, possibly rivaling that of Halliburton.Schlumberger’s hydraulic fracturing fleet currently has 2 million horsepower and Weatherford’s is estimated at 800,000-1 million HHP. The combined horsepower as OneStim exceeds BJ Services’ 1.9 million...

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NOV Banks on Growing Demand for Longer Laterals, Improved Monitoring

On April 27, 2017, National Oilwell Varco (NYSE:NOV) released its Q1’17 results to investors in its quarterly earnings call. During the first quarter, the company booked orders for75,000 HHP additional hydraulic fracturing equipment, bringing the company’s 2017 total to 150,000 HHP 30 high-spec well servicing rigs, featuring components that optimize a rig’s ability to adapt to a variety of applications, including extended lateral completions 16 NOVOS™ rig operating systems, which automate drilling activities and leverage real-time data for optimizing...

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Earnings Season Recap: E&Ps Prepare for 10%+ Cost Increases

Key Themes from Last Week's Earnings CallsE&P capital remains unchanged going into the second quarter Frac crews are sparse as many pressure pumpers continue to reactivate fleets Drillers see increased day rates to around $20K per day as operators continue increased drilling programs Frac sand prices are increasing as sand shortages continue Sand companies looking to increase supply with greenfield and brownfield expansionThe DetailsRange Resources (NYSE: RRC) drilled 3 laterals over 15,000’ and seven over 10,000’ in the...

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A Shortage of Frac Sand Will Bring Supply Chain Challenges

Many oilfield service and supply companies, including Halliburton (NYSE: HAL), Hi-Crush (NYSE: HCLP), U.S. Silica (NYSE: SLCA), and Fairmount Santrol (NYSE:FMSA) have cited a shortage of frac sand for the U.S. shale plays, specifically 40/70 in the Permian Basin.Advancements in the horizontal drilling and completion techniques of leading shale E&P’s are driving frac sand demand to new high points. The significance of multi-well pad drilling in the Permian increased each of last several years, even during the downturn. In...

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Pioneer Energy Services Banks on Increased Activity in 2017

On February 17, 2017, Pioneer Energy Services (NYSE: PES) shared with investors its Q4’16 results and some details from its Q1’17 guidance. The company’s drilling rig utilization was 48% in Q4’16, up from 38% in Q3’16; for Q1’17, utilization is expected to increase to 70-73%.Forty-one percent of PES’ TTM revenue came from its US drilling services and 57% from its production services, encompassing well servicing, wireline, and coiled tubing:Source: Pioneer Energy Services Investor Presentation, February 2017 The company reported that some...

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