Infill Thinking Lifting the O&G knowledge curve

Mammoth Energy Services announced Thursday that it has signed a three-year take or pay deal to provide Wisconsin frac sand to an undisclosed pressure pumper. The contract contemplates annual volumes of 720,000 tons comprised of several different grades including 20/40, 30/50, and 40/70. We have thoughts on pricing relative to recent benchmarks, what …

Is frac sand replacing rigs? It would appear so in the US onshore recovery. As unconventional drilling and completion science evolves, the industry’s surface footprint per barrel of oil produced is shrinking. A growing sub-surface footprint (which we can measure with sand) is replacing the surface sprawl. With the US onshore …

There is a new discussion topic posted in our Thinking Aloud forum today. In it we have seeded the conversation on: E&P outspending (capex vs. cash flow) behavior historically, Considerations for how much of the US onshore rig count surge is self-funded, and Thoughts on how long outspending by US …

In the Permian Basin, horizontal drilling activity is up 101 rigs so far this year. This is more than 2x the next fastest growing play (Eagle Ford +41). In this week’s Infill Thinking rig count update, we get granular on Permian growth. We’ve ranked the counties across the Permian’s basin trifecta …

Is it counterintuitive to view a court ruling against an industry participant’s expansion plans as a good thing? Yes. However, in a niche where oversupply fears have crushed the stocks of publicly traded incumbents, maybe a legal governor on the expansion plans of the few can serve the greater good. …

Each Friday in June, we are passing the keyboard to one of our readers to share perspective from the field. We have handpicked these experts in their fields to share insights on key oilfield trends and debates. Writing in from the east coast of Canada, Jonathan Dunnett kicks off our Fridays …

Over the past two weeks, three different EOG execs spoke at three different investor conferences. Reviewing their commentary and separating signal from noise, here’s the latest on this E&P leader’s field tactics and development strategy. There’s a lot more to this story… Login to see the full update…  To read this update …

Here is the latest data-point in the emerging Permian Basin frac sand mine build-out. Who filed the permit, when, where, and what’s next in this update. There’s a lot more to this story… Login to see the full update…  To read this update and receive our research newsletters, you must …

Tuesday was a day of dichotomy for the notion of operational scale in offshore drilling. Even as one drilling contractor paid penance for scale bought long ago, two others ignited the next round of consolidation, extolling the virtues of operational scale in this disaggregated sector. Taken together, these two news items …

Over the next nine months, Permian Basin frac sand miners will need to hire hundreds of workers to staff up the new mines they have planned. With the Permian Basin oilfield labor market already white hot and all the new hires slated for a sparsely populated area, where will the …

As an Infill Thinking subscriber, you have some very good company. Executives, analysts, traders, salesmen, investors, academics, attorneys, regulators, and engineers from all across the oilfield now take Infill Thinking. We are humbled by the brain power of the folks we write for. That’s why we decided to do something …

  The first chapter in the Permian Basin frac sand mining story was the land grab (who was buying what where) and debate on viability. The 2H17 chapter will be execution, lab results, construction progress, and sales (whose construction is on time, whose deposit is better). One of the best datapoints to …

Today we are kicking off a new series, Follow The Leaders, in which we’ll be distilling real-time conceptual shifts discussed by leading unconventional E&Ps into quick, digestible updates. The purpose of this new series is to document only the most important big picture thinking, science, and experiments the US tight oil leaders are exploring …

Newly minted Halliburton CEO Jeff Miller spoke earlier this morning at the UBS conference in Austin, TX. Although he’s no stranger to the investment community, this was his first presentation since being named Dave Lesar’s successor. In a wide-ranging “fireside chat,” Jeff shared market insight on frac sand availability, logistics, completions …

Helmerich & Payne, the clear first mover in the last rig technology cycle, has been more “middle of the pack” this time. Until now. This week, H&P bought their way into the high tech drilling conversation with the acquisition of MOTIVE Drilling Technologies. The last time H&P press released an …

Emerge Energy Services has been in the news quite a bit recently after hosting their earnings call earlier this month and making an Eagle Ford mine acquisition a few weeks before that. After all their recent disclosures, there wasn’t a whole lot of “new news” made at their analyst day last …

We celebrate the recovery’s one-year anniversary by comparing how this recovery compares to others, revisiting our 2017 rig count forecast, and detailing rig count by region across the US. feature image photo credit: @jasplund91 There’s a lot more to this story… Login to see the full update…  To read this update …

Hard to believe, but there are only six weeks left in the first half of the year. And what a first half it has been for the Permian Basin frac sand story. This year, the Permian Basin sand land grab burst on the scene like TNT, capturing the entire industry’s attention and …

On Wednesday this week, Halliburton announced that COO Jeff Miller will replace outgoing CEO Dave Lesar. In early March, Weatherford announced the hiring of then Halliburton CFO Mark McCollum as their new CEO. These two announcements may be more related than first meets the eye. There’s a lot more to …

  In a feature story on Bloomberg News Thursday morning, several research updates issued by Infill Thinking recently are featured prominently. Check out Joe Carroll’s latest must-read below… Bloomberg No Description There’s a lot more to this story… Login to see the full update…  To read this update and receive our research …

Black Mountain’s message to the market has been that they would build one 4mmtpa frac sand plant in the Permian first with more facilities on their extensive 26,000 acre footprint to follow at future dates. We’ve recently heard some chatter about the company shifting to a two site initial roll …

A round up of various talking points and trends in the US frac market as it stands today including comments on pricing, utilization, availability, contracting activity, and completion size trends. There’s a lot more to this story… Login to see the full update…  To read this update and receive our …

Although the drilling rig itself is only about 10% of total onshore well costs these days, it has become the epicenter of the industry’s latest technology craze: automation, digitization, and big data. As market leaders embark on a new technology cycle, drilling days/well are poised to keep trending down. One day …

About a month ago, we noticed a material spike in permitting activity for horizontal wells in the Permian Basin. Based on historical data, the March spike suggested that the Permian horizontal rig count could increase further 25%. We look at what’s happened since then, and update our permitting analysis for April data in this …

Two months ago, we published an in-depth report on Encana’s 64-well monster pad, Davidson, in the Permian Basin. At the time, 19 new wells were being drilled on the pad. Those wells have now been completed. In this update, we explore the very latest details on their production, status, and Encana’s large …

The oilfield service IPO surge this year has been met with a hostile energy tape. Over the past week, two oilfield service IPOs attempted to cross the finish line: Liberty Oilfield Services and Solaris Oilfield Infrastructure. Both were met with pushback. But Solaris got done and Liberty didn’t. Here’s why and what it …

1Q17 reporting season is drawing to a close. Over the past week, we heard from two more frac sand miners: Smart Sand Inc. and Emerge Energy Services. To cap off earnings season, we went back through our conference call notes from these two producers and pulled out the eight most important points …

Smart Sand Inc., the newly public Northern White producer (February IPO), announced another Oakdale plant expansion on Thursday. This is the second expansion announced already this year and the latest example of the kind of brownfield expansion that is conspiring with regional sands to make operators happy and sand investors nervous. …

We actively monitor spending patterns for approximately 50 public independent operators. With virtually all of their 1Q17 results disclosed over the past week or two, we can now report some detailed insights on what their spending during the first quarter of the year means for the rest of 2017. There’s a lot …

In a piece several weeks ago, we detailed how Range Resource handled material frac interference in their Terryville field (see point 5). Since then most of the E&P universe has reported earnings. On conference calls, we heard more concern related to frac communication, and learned more about how E&Ps are dealing with it. …

We have uncovered two more future frac sand mines in the heart of the Permian. These sites take our “confirmed planned site” count up to 6 in the area – a figure that could easily be 10 by the end of May. Although the market is aware that Permian sand mines …

Last week after scouring air permit data, we identified a new sand mine site in Culberson County Texas In conversations with readers offline, the potential mine’s location has come up several times as a sticking point. Could this sand be stranded if indeed it is pointed at the frac industry? (questions …

The impact of in-basin sand on the US supply stack is not only the key debate in the silica industry today. It is the single most important debate in the entire US oilfield at present. Today, three-fourths of US frac sand is sourced north of the Mason-Dixon line, but there are …

This week, Offshore Technology Conference attendance fell for a third straight year. Higher oil prices and the US onshore recovery didn’t buoy turnout. That said, attendance might have slipped more without the draw of US onshore technology exhibits at the event. We’ve got stats charts and anecdotes from the conference in this …

As usual, NOV’s earnings call last week provided detailed color on the oilfield supply chain. CEO Clay Williams always does a good job of taking listeners inside his manufacturing shops around the oil patch. If there is iron in the oilfield, there’s a good chance at least some part of …

Infill Thinking members are already up to speed on the first two frac sand mine facilities planned in the Permian Basin (Hi-Crush’s Kermit site and Black Mountain’s first Winkler County mine). Although other specific sites have yet to be announced, it’s no surprise they are in the works. Today, we identified two more …

If deepwater rig demand were to begin its ascent today, it would be met with a glut of rigs that would render the impact on dayrates, and indeed contractor bottom lines, relatively impotent. If more rigs aren’t removed from the structural oversupply before demand moves higher, drilling contractors are at risk …

A quick update here (including our first visual) on the new Permian Basin frac sand mine that started it all. On Monday evening the new facility’s owner provided an update on the new mine’s construction progress. As part of that, the company shared the very first peek at what they’ve been building …

Most industry observers now accept that the oilfield is on a path towards digitization, big data, machine learning, more integration, and automation. Instinctually, most of these same observers would probably not pick land contract drilling as a segment to lead the charge. But it has become increasingly clear to us that …

Can lower quality, logistically advantage frac sand deposits take on and potentially displace Northern White supply railed into the hottest completions markets? This question has quickly rocketed up the controversy leader-board, becoming one of the most hotly contested debates in the entire upstream industry today. As the first industry publication …

A portfolio manager I worked for in a prior life always said “focus on process not outcome.” It’s a helpful way of approaching problem solving and decision making by shutting out the distraction of daily progress toward goal. At the end of the day, outcome is all that really matters to stakeholders …

With 27 oilfield earnings reports this week, including a dozen conference calls on Thursday alone, C-suites across the patch opened the information flood gates. We continue to pore over transcripts and 10-Qs. For this update, we are driving right on past the usual suspects. Laterals are getting longer, sand’s expensive and …

On ExxonMobil’s conference call Friday, we will be listening for talking points on two key development areas in particular: the Permian Basin and the deepwater Liza development offshore Guyana. The Liza development is especially important as it is one of the first major deepwater projects that is moving forward since the …

This week, we put the oil market’s biggest open question to oil traders on Twitter. What will OPEC do in exactly one month when the group meets to decide whether to extend the production quotas implemented in November 2016? We polled the most influential oil trading group on Twitter (#OOTT) on …

US Silica hosted a positive call to kick off 1Q17 earnings season for the frac sand industry this morning. The outlook provided was bullish for both demand and pricing. The company’s commentary on the emerging Permian local sands market both validated our own thesis and introduced cautionary notes into the …

So far in the upcycle, the well cost inflation discussion has largely focused on hydraulic fracturing pricing (both HHP / stage pricing and consumables). Rightly so, as leading edge price per stage has essentially doubled year-over-year. Prices for surface casing and tubing (collectively OCTG) are rising cyclically as well and the market is …

With all the talk of local sands in recent weeks, we thought it’d be worthwhile to map rigs vs. mines. Shown on our map in this update is the dispersion of the US horizontal rig count plotted against the percentage of US frac sand capacity arising from a half dozen …

If you ever want to nerd-out, visit Core Lab’s Houston facility. After a tour, you’ll understand why “lab” is part of their name. This is the highest-IQ company in oilfield service. They are also closer to operators’ rock than any other service firm. Core Lab is not a pressure pumping …

With Schlumberger’s earnings call this morning, oilfield earnings season is officially underway. CEO Paal Kibsgaard addressed several of the themes we expect to dominate the conversation this earnings season including US price increases and activity strength and maybe over-exuberance, sluggish international conditions, aggressive frac reactivation, new business models in offshore drilling, …

After announcing the acquisition of a San Antonio sand mine on Monday, Emerge Energy Services hosted a conference call on Wednesday to discuss the deal and future plans for the site. If you need to get up to speed on the transaction and our initial take, please refer to this …