Topic: Eagle Ford Shale

West Texas inSANDity Continues in the Permian

Last week in Houston at the Frac Sand Supply & Logistics Conference, all signs pointed towards more sand per lateral foot, more mines in the Permian, and more trucks to deliver frac sand to the wellsite. Frac sand demand in the Delaware and Midland Basins is expected to increase. E&Ps have increased the proppant per lateral foot by 31% in the last year, with public E&Ps citing the transportation and logistics constraint as a concern, not frac sand supply. Regional replacement? Based on...

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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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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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Sanchez Energy (NYSE: SN) Expects to Double Production in 2017

Sanchez Energy Corporation (NYSE: SN) had a blockbuster 2016, partnering with Blackstone the companies acquired Anadarko’s acreage in the Eagle Ford which is expected to close in the first quarter of 2017. This acquisition adds 132 DUCs, 3,400 drilling locations and 67,000 net Boe per day. The company optimized its well design in Catarina decreasing drilling and completion costs which are currently around $3 million per well.     In 2017, the company is expecting to spend $425 to $475 million and increasing...

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Marathon Unveils $2.2 Billion 2017 Capital Program

On February 15, 2017, Marathon Oil Corporation (NYSE: MRO) announced results from Q4 and FY 2016 and unveiled a 2017 capital program of $2.2 billion, with over 90 percent allocated to its high-return U.S. resource plays. Oklahoma Led Production in the Fourth Quarter On the operations side, Marathon’s production averaged 341,000 BOED in Q4 2016, with assets in the Oklahoma Resource Basins reporting a production increase of 60% over Q4 2015. E&P production costs for North America were down more than 30%...

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Anadarko Divests in 2016 to Accelerate Activity in the Delaware and DJ Basins

On January 31, 2017, Anadarko Petroleum Corporation (NYSE: APC) announced its Q4 earnings as well as its full-year results for 2016. In 2016 Anadarko improved cost structure and advanced efficiency initiatives, resulting in a 50% reduction in capital investments relative to 2015.Specific highlights of 2016 cited in the announcement included the following: Value-Accretive Monetizations In Q4 Anadarko signed agreements to divest assets in the Marcellus Shale ($1.24 billion) and the Eagle Ford Shale ($2.3 billion). Both transactions are expected to close by the...

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Proppant Insights: The Battle for Frac Sand Market Share

The last quarter brought about activity across frac sand suppliers as providers continued moving towards the Permian Basin. For the last three quarters, Permian leads proppant demand. Due to the reporting lag in completions, expect the Q2 numbers to increase by another 10-20%.Since 2015 Q4, E&P companies in the Permian have consumed approximately 11 billion pounds of frac sand. Recent well reports show 1,200 - 1,500 pounds of proppant per lateral foot in the Delaware. A few E&P's are pumping nearly...

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