US Land To Achieve Record Frac Stage Counts in 2013; Efficiencies Continue to Restrain Demand

HOUSTON, Nov. 22, 2013 /PRNewswire/ -- Based on its latest PumpingIQ hydraulic fracturing report, PacWest Consulting Partners forecasts that the US Land market will complete a record number of hydraulic fracturing stages in 2013.  Despite lower US rig counts, increasing frac efficiencies and a higher number of horizontal wells are driving the growth in total frac stages.  PacWest does not expect improvements in market pricing for frac services until 2015. 

Oil and gas drilling and completion activity in the US is robust, but increased efficiencies are restraining recovery of frac demand. PacWest forecasts that US horizontal rig count will increase by 1% in 2014 after falling by 5% in 2013. Additionally, PacWest forecasts horizontal well frac'ed to increase by 5% in 2014, following an 11% increase in 2013. Improvements in frac efficiency and productivity have structurally reduced demand for frac horsepower.  

"The North American market for hydraulic fracturing services is expected to remain stubbornly over-supplied, with no meaningful increases in pricing likely until 2015," says Christopher Robart, Partner of PacWest's Market Intelligence business.  "Frac pricing is still highly competitive, with pumpers of all sizes bidding aggressively.  However, we do expect stable pricing in 2014."

The one potential bright spot in North America is Canada, where moderate pricing increases are expected in late 2014. Much of the anticipated demand ramp-up will occur as a result of activity growth in the Duvernay and the Montney plays to support West Coast LNG development.

Global hydraulic fracturing capacity will total 24.6 million HHP at year-end 2013, with North America accounting for 75%. North America's share of global frac capacity is expected to decrease to 57% by year-end 2018, as international capacity grows. Globally, frac capacity is expected to grow by 12.0 MM HHP (49%) between 2013 and 2018 (year-end capacity), with markets outside North America accounting for 80% of that growth. China will lead the world in frac capacity additions in 2013, and sometime in 2013 it has overtaken Canada as the second largest frac market in the world.

PacWest has recently begun publishing key market figures on its website, with plans to update each quarter, in effort to provide greater transparency into the oilfield services market. Please visit PacWest Market Outlook for more information.

Please join us for a conference call on Thursday, December 5, 2013 at 10:00 AM Central Time to discuss our latest view of the market. Call details are provided below.

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About PacWest

PacWest Consulting Partners is a boutique strategy consultancy and market intelligence firm that specializes in the energy, industrial, and resources sectors.  Much of its work is focused around the oilfield and the many industries that supply critical products and services to it.  With the explosion of unconventional resources in North America, the energy landscape is changing quickly.  PacWest is at the forefront of that change, helping companies better understand the market and develop and implement new strategies to position themselves for growth.

PumpingIQ is the only market research product that provides a bottom-up view of the North American and global hydraulic fracturing market with granular counts of frac fleets and capacity, demand estimates, capacity utilization forecasts, and pricing forecasts.  It also highlights major market trends for each play in real-time, gathered from on-the-ground field staff in each play.

WellIQ, provides a 3-year forecast of total well completions by each major US and Canadian play.  It also includes a forecast of drilling rig counts, drilling efficiencies, frac stages completed, and multi-well pad penetration.

PacWest has recently launched several new market intelligence products:

ProppantIQ analyzes and forecasts sand, resin-coated, and ceramic proppant supply, demand, and pricing on a regional basis.

ChemIQ offers a suite of products that analyze and forecast critical stimulation chemicals, specifically Guar, Biocides, Scale Inhibitors, Crosslinkers, Breakers, HCl, Friction Reducers, and Surfactants, as well as an overview of stimulation chemical demand and technology trends.

PumpingIQ China provides a bottom-up view of the China unconventional and hydraulic fracturing market, with granular detail similar to PacWest's PumpingIQ product. This is the first product available to provide detailed analysis of the rapidly evolving China oilfield services landscape.

CONTACT: Jennifer Thomas, 1-713-929-3285, [email protected]

SOURCE PacWest Consulting Partners