The answer is "Probably Not" in the short term...

From one industry forecaster-Key points:

-Most of your serviceable equipment and crews are already working and are close to being at capacity.

-Global Supply Chain issues are hitting everyone and are having impacts on building new fleets/spreads/getting consumables and the like. Its going to take a long time to "ramp up".

-Most of the Majors and Independents were spending their capital retiring debt accrued during COVID survival or doing stock buybacks. But, Independents will probably be more aggressive in this crazy market.

-The "transition" to renewables and political pressure on banks to not loan money for oil and gas.

-Oil field talent quitting vs hiring. (Well Service Crews)

-The comfortable price of oil is about $85. But, some folks are now predicting up to $200 before it goes back to that...

Executives at independents have made it well known they are not growing production more than 5%. They have gone a full decade without making any money, now is the time to pay back the investors.

And your points are valid too.. the sector can't handle much more activity

The mouthpiece of the Biden administration doesn't seem to think so(gaslighting). Thread about how much oil we have been producing, and how much moore this year we will pump!

2. U.S. production of natural gas and oil is rising and approaching record levels: More natural gas than ever this year, more oil than ever next year, and, even with a global pandemic, more oil production this past year than during the previous administration’s first year.

— Jen Psaki (@PressSec) March 6, 2022

Native West Texan here: OP we have heard that a million times going back decades.

There has been about three major 'drilling tech advances' that have pulled us out of past 'bust'. Its the nature of that game. But yes when fusion is perfected then you can bury oil.

Oh wait I forgot about plastics, pharma, chemicals, etc.

Let's add that the producers aren't allowing price to scale for the service providers. They are still only winning bids on 3 yr old pricing Vs the economies of today.

Biden's America dream - lines at gas pumps

I work in an industry that serves O&G.

My company, and my competitors, are at a minimum of 6 months away from being able to supply key components used in drilling.

Similar time frame for increasing output for completion activity.

In short, it will be a while before activity can really increase in the US unless the drillers can find stock on items sitting in warehouses of distributors or in their own stock. Because the mfgs are not in good shape right now.

Two examples.

Drill motors (mud motors) are either made out of S2 or 8620 steel. Nobody is sitting on those types steel right now so getting new motors into the field would take at least 6 months. S2 is not normally supplied out of US steel mills either.

Specialty elastomers used in frac consumables are in short supply. So major users won't be able to frac much above their current levels. This problem could be solved quickly but it would mean taking product away from other industrial sectors like mining, etc.

Madman said:

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I work in an industry that serves O&G.

My company, and my competitors, are at a minimum of 6 months away from being able to supply key components used in drilling.

Similar time frame for increasing output for completion activity.

In short, it will be a while before activity can really increase in the US unless the drillers can find stock on items sitting in warehouses of distributors or in their own stock. Because the mfgs are not in good shape right now.

Two examples.

Drill motors (mud motors) are either made out of S2 or 8620 steel. Nobody is sitting on those types steel right now so getting new motors into the field would take at least 6 months. S2 is not normally supplied out of US steel mills either.

Specialty elastomers used in frac consumables are in short supply. So major users won't be able to frac much above their current levels. This problem could be solved quickly but it would mean taking product away from other industrial sectors like mining, etc.

---

yea, i talked to my pipe supplier on friday to get a feel for what they were seeing and was told most significant orders for steel pipe have lead times of about 9 months out right now.

If you need a Caterpillar engine to power that rig CAT is quoting Q1-Q2 2023 delivery of a C32 engine to their distributors.

redhead demon!

Copied from an investor presentation of a project I'm involved in....
Presentation was given a week and a half ago. Before oil spiked

Vertical well... That's all of the details I'll provide

Quote:

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Costs have dramatically increased
EX 9 5/8" was $46, bid in December was $84
Day cost for rig for #307 was $18k, same rig day rate is $24k / day

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No way, at least until 2023. Plus we are about to get hit with more surcharges so if you think the price of oil is high now just way. Metals labor, and chips are what is causing the supply chain issues.

Pansy ass response to covid has screwed supply chain for foreseeable future. FJB

yell_on_6th st said:

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Pansy ass response to covid has screwed supply chain for foreseeable future. FJB

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So much this.

will25u said:

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The mouthpiece of the Biden administration doesn't seem to think so(gaslighting). Thread about how much oil we have been producing, and how much moore this year we will pump!

2. U.S. production of natural gas and oil is rising and approaching record levels: More natural gas than ever this year, more oil than ever next year, and, even with a global pandemic, more oil production this past year than during the previous administration’s first year.

— Jen Psaki (@PressSec) March 6, 2022

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If course we pumping more than when Trump took over from Obama because it takes time to ramp up. Why not compare to 2019? I am sure it has nothing to do with policies that were intended to lower production.

Kenneth_2003 said:

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Copied from an investor presentation of a project I'm involved in....
Presentation was given a week and a half ago. Before oil spiked

Vertical well... That's all of the details I'll provide

Quote:

---

Costs have dramatically increased
EX 9 5/8" was $46, bid in December was $84
Day cost for rig for #307 was $18k, same rig day rate is $24k / day

---

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Fug me $84/ft??

BlackGoldAg2011 said:

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yea, i talked to my pipe supplier on friday to get a feel for what they were seeing and was told most significant orders for steel pipe have lead times of about 9 months out right now.

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Yup. It's crazy right now.

You have to open up the pipelines and encourage building new pipelines.

More gaslighting today by Psaki.

The @PressSec repeats the White House line which is that the oil and gas industry should make do with existing leasing permits, rather than demand new ones. She also points out that "the US produced more oil this past year than in President Trump's first year."

— Philip Melanchthon Wegmann (@PhilipWegmann) March 7, 2022

I do sorta wish some reporters would quit sole focus on Keystone and give more examples of EOs that have been enacted and current judicial rulings that are causing pause for producers as well as midstream and I am sure others as well.

We discuss Keystone....what about DAPL which has been under litigation for 2+ years and has been fully operational for a while....the threat of shut-downs by government / judicial rulings hinders development of our energy sector....

Meeting with a variety of customers today and I can tell you that the ramp up is going to take longer than you would expect.

Supply chain and manpower issues all across the board.

We can get there it is just going to take awhile. See my OP. Everyone is saying the same things...

Drop the federal regulations that Biden enacted and step back and watch a miracle.

I don't know the answer here...but not just drop regulations....but there has to be a form of "guarantee" for a period into the future....capex spend needs more than 1 good year to be profitable and this administration would be happy to shut it all down once Ukraine issue slows down....

How about vs Trump's last year, peppermint patty? We are down massively

Service company pricing needs to go up as well.