Permian Part 2 of 2: Top OFS Companies Lose Share of Midland Basin

Permian Part 2 of 2: Top OFS Companies Lose Share of Midland Basin

As a follow-up from last weeks’ article on the Delaware Basin, this week we review the Midland basin to see how activity has declined and what counties, operators, and oilfield service companies are hanging in there. Operators in the Permian depend on the play for the best economics to produce in this low priced environment, moving away from other non-core areas.

The Midland basin has seen a steeper drop in activity compared to the Delaware, showing a -65% decline in the number of frac jobs from the fourth quarter of 2014 to the fourth quarter of 2015.

midland-basin-total-frac-count-line-chart

Midland County Takes Over Andrews as Most Active

In the Midland basin there has been a shift in the most active counties. Midland county has declined activity by -62% from Q4 2014 to Q4 2015 dropping to the second most active county after Andrews which has only declined -36% in the same time period. Martin and Glasscock are still in the top five most active counties.

midland-basin-county-bar-chart

Operators Relying on the Midland Basin to Make It Through

Operators leading the way in the Midland Basin are Pioneer, ExxonMobil, Apache and Occidental based on the number of frac jobs since 2014. An operator outside the top bunch that has stood out is American Energy, who has been focused in the Regan County area of the Midland basin. They have about 235,000 net acres in the area and continues to perform about 20 frac jobs per quarter since the start of 2015.

midland-basin-operator-chart

Pioneer Natural Resources has made it clear that they will be sticking to what they do best and that is drilling and completing in the Permian. The company is planning to spud 195 wells in 2016 and relocating two pressure pumping crews to the Permian from the Eagle Ford. Occidental Petroleum will be using 21% of their $2.8 to $3 billion capital budget in the Permian in the Midland and Delaware basins where they have existing infrastructure.

Have Top OFS Companies Held Market Share?

midland-basin-frac-count-by-OFS-chart_V2

Looking at how the OFS market has changed in the Midland basin we have discovered that although frac counts are down that some companies are gaining market share. Take for instance Halliburton which has seen a -45% drop in the number of jobs YoY but moved slightly from 25% of the total jobs in Q4’14 to 29% of the total jobs in Q4’15.

Other OFS companies that have seen an even larger increase in market share are Pioneer Pumping Services, Patterson-UTI Energy, C&J and Sanjel. Pioneer and PTEN have held activity near levels seen in the final quarter of 2014 with Pioneer declining -12% and PTEN a minor-2% YoY.

midland-basin-OFS-percentage-chart-V2

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