On a conference call in 2011, the always eloquent Clay Williams of National Oilwell Varco (then CFO, now CEO) said: The unconventional shale model is utterly unlike drilling a generation ago, which saw fleeting glimpses of precious darcy reservoir rock here or there, elusive four-way closure, a rare and fortuitous geologic …
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A December To Remember – The Biggest US Drilling Gain In Three Decades
US land drillers sent 2016 packing with a bang. Since May, the drilling recovery has looked exceptionally strong on a percentage basis. The December trend looked exceptionally strong on an absolute basis too with 65 US rigs returning to work. December 2016 delivered the best absolute rig count increase of …
Read More »2016 US Land Rig Retirements Slowed Rapidly And Other Highlights From NOV’s Rig Census
Each winter, we look forward to unwrapping the annual rig census report released by National Oilwell Varco. With it’s uniquely comprehensive rig market history, the report provides good perspective on the competitive landscape for drilling rigs around the world. There were no surprises on the demand side this year – …
Read More »A Key Difference In The Industry’s 2nd BOP Outsourcing Deal Makes It Transformative
It’s fair to say that the blow out preventer (BOP) business model is being re-shaped as we write. 10 months ago, GE and Diamond introduced a new BOP arrangement to the marketplace – one that transfers up-time responsibility to the OEM. This week, the largest BOP supplier moved to implement …
Read More »Here Come The Guidance Raises In Oilfield Services
In an interim update posted this morning, oilfield chemical supplier Flotek positively revised its outlook to account for a more constructive US drilling and completions market as 2016 winds down. Last week we wrote about how the consensus 4Q slump is a no show this year. Flotek’s announcement provides confirmation and …
Read More »The Sharpest Drilling Rebound In US History Is Happening Right Now
The US land drilling market is exiting the worst downturn in history. Why not follow that with the sharpest rebound ever? That is exactly what is happening now. Since bottoming about 30 weeks ago, the US rig count has increased 60%. The 1985 recovery outpaced this one for 25 weeks before falling back. The only …
Read More »FRAC IPOs Return… Literally. Meet The Next Public Completions Outfit
Frac IPOs are back. We mean that literally because the company about to make its public debut will trade under the ticker FRAC. This week, Keane Group Inc., owner of the 7th largest US frac fleet and employer of 1,251, filed an S-1 for a potential IPO. The company is …
Read More »As The Fed Climbs Out Of The Interest Rate Crevasse, O&G Implications Are Mixed
The Fed raised interest rates for the second time in a decade on Wednesday. The Federal Open Market Committee raised its target range by a quarter point to 0.5% – 0.75%. The committee also expects to make three rate hikes in 2017, two or three in 2018 and three in 2019. …
Read More »In Offshore Drilling, Financial Restructuring Quietly Chugs Along As Noble And Shell Arrive At New Terms
Even when offshore drillers aren’t tapping the capital markets for debt or equity, financial restructuring is quietly continuing behind the scenes. Contractual terms continue to be renegotiated with customers, and price concessions are still being given. Literally hundreds of multi-year contracts that were in effect this time two years ago have …
Read More »What Fourth Quarter Slump?
Back in October, the North American land market was bracing for a seasonal slowdown into year-end. Here’s the warning Halliburton CEO Dave Lesar issued on a conference call about 6 weeks ago: “Based on current customer feedback we remain cautious around customer activity due to holiday and seasonal weather-related downtime. Our customers …
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