PacWest/IHS Unconventional Market Update, 15Q1 Conference Call June 25th

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Pricing Down 35% in North American Frac Market; Slow Recovery Expected

We are pleased to announce we will be hosting a conference call on Thursday, June 25th at 9:30 am CST to discuss its outlook for the hydraulic fracturing market, based on our recently published PumpingIQ reports.

We forecast a slow recovery in the North American market for hydraulic fracturing services.  D&C activity in North America should find a bottom in 15Q3, before beginning a slow but steady improvement. Despite some recovery in oil prices in 15H1, rig count is less than half the level of 14Q4. Low utilization and falling prices are creating major challenges for frac companies.

Frac demand in the US Land market will fall by 35% in 2015 and the number of frac stages is expected to fall by 32% in 2015, compared to a 44% fall in rig count. North American frac capacity additions have been scaled back significantly from 6 months ago. While most capacity contracted for 15H1 delivery has been received, capacity slated for 15H2 delivery has largely been pushed back to 2016.

Frac pricing is expected to fall by 35% by year-end 2015 (compared with year-end 2014 pricing).  The first major round of pricing concessions in 15Q1 sent frac pricing down 19%. A second round of concessions in 15Q2 has seen pricing drop another 12%, with incremental pricing reductions through 15H2 expected.  Operators continue to report that unsolicited bids are common and many pumpers are engaging in aggressive price discounts to win work and position themselves for the eventual recovery.  Unless the recovery in D&C activity ramps up more quickly than current forecasts, substantial recovery in frac pricing is not expected until early 2017.

The market update conference call is scheduled for Thursday, June 25th at 9:30 am CST. To receive webcast details, register here. The call is open to the public.

 

To Frac or Refrac Webinar Big Success

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PacWest/IHS is developing a new research product on Refrac, as industry leaders see the potential for refracturing to boost production without the need to drill new wells improving capital efficiency as required in the lower oil price environment. Wells originally fractured with sub-optimal technology and techniques appear to be the best candidates for refracturing. We hosted an opening call on Wednesday, May 20th to discuss feasibility, economics and current and future market of refracturing including techniques, costs, impact on production, play potential, and current and future trends and market sizes. Over 400 people joined the call and provided feedback. Click here to listen to the playback (register with your name & email and it will present a link to “Launch Presentation”).

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Refracturing might account for 12% of the overall market in the future.

Please call 888.983.1110 for more information on the upcoming Refracturing report, to be published early June.

To Frac or Refrac: Upcoming Webinar May 20th

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We’re developing a new research product on Refracturing in response to increased interest from operators, service companies, and investors. There is immense potential for refracturing to boost production without the need to drill new wells improving capital efficiency as required in the lower oil price environment. Wells originally fractured with sub-optimal technology and techniques appear to be the best candidates for refracturing. However, refracturing is less predictable and therefore potentially riskier.

Please join IHS Energy/PacWest for an open webinar to introduce new insights on refracturing. We’ll present key questions for discussion on the new study To Frac or Refrac, including the feasibility, economics and current and future market. Webinar is Wed., May 20th at 10 a.m. eastern. Register Today!

PacWest quoted in Bloomberg

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PacWest Consulting Partners, an IHS company, was quoted in Bloomberg on crude pricing drop in India, which accelerated when the Organization of Petroleum Exporting Countries, whose members control about 40 percent of global oil production, voted in November to maintain output in an effort to protect its market share.

“We have seen buyers of all sorts of consumables, like guar, putting new purchases on hold over the last couple of months, as they try to understand how the oil price fall is going to play out through the supply chain over the next six months,” Alexander Robart, a partner at Houston-based PacWest Consulting Partners Ltd., said in an e-mail. “Purchases will resume eventually, but at a lower level to support the ‘new normal’ activity levels.”

For the full article, please visit http://www.bloomberg.com/news/articles/2015-02-09/u-s-fracking-bet-haunts-vikas-after-oil-plunge-corporate-india

PacWest Cited in Slow Fracking Growth Article

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Senior Consultant Caldwell Bailey quoted in Gannett Ohio arrticle, “Low gas prices may slow fracking growth.”
http://www.bucyrustelegraphforum.com/story/news/local/2015/01/09/low-gas-prices-may-slow-fracking-growth/21532527/

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