STAGES Update: 5/21/2021

Here is the update for the 21st day of the 21st year of the 21st century:

STAGES Pumped

The frac crew count remained flat last week and so did the stages pumped.

STAGES Created

Though there was an uptick in the overall horizontal rig count, the mix in the basins changed. The Permian, Eagle Ford, and Haynesville all lost a rig (probably due to rig movement), while Oklahoma added 4 rigs across the various Woodford basins. The changes in the mix resulted in a slight decrease in the number of stages created for the week.

STAGES Ratio

Because the change in rig count was slight and the crews were flat, the STAGES ratio remained the same. As did the 6-month moving average.

STAGES News

Matt Johnson, CEO of Primary Vision, and Mark Rossano, CEO of C6 Capital Holdings, had a great article in American Oil & Gas Reporter titled “Rebounding Frac Activity Starting To Hit Constraints, Growing Cost Pressures” and can be located here. Their analysis of the drilled but uncompleted (DUC) well drawdown was particularly interesting. According to their data the four major basins of Permian, Eagle Ford, Marcellus, and Bakken have all experienced a significant decrease in the number of DUCs. Since I started this report back in April, the number of zones frac’d have been more than the number of zones created. Companies are completing wells at a faster pace than drilling them, indicating that they’re completing their DUC wells. They expect the rig count additions to start outpacing the crew increases, which with slow or stop these drawdowns.

The authors feel that if the crew count continues to increase, as it is expected to do, the industry will be close to full utilization. They quote the recently reported increase in order book for their capital equipment as evidence that the industry is nearing the point where additional equipment will have to be added to satisfy the demand of the industry. This will result in “the first time in years that operators start paying more for oil field services.”