Why is Baker so damn dumb when it comes BJ?
Baker Hughes teams up with financial firms to create new energy co.
Baker Hughes teams up with financial firms to create new energy co.
Houston..we have a problem....
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Last: 14 hrs ago by TxAg20
In other sides of the industry - the midstream gathering and processing equipment deals are starting to pick up.
Lots of compression HP going out for bid. Several new processing plants have been committed for 2017 install/ 2018 startup.
Caterpillar has pushed back delivery of some of the gas engines, not sure about diesel for drilling and frac but good signs nonetheless.
Lots of compression HP going out for bid. Several new processing plants have been committed for 2017 install/ 2018 startup.
Caterpillar has pushed back delivery of some of the gas engines, not sure about diesel for drilling and frac but good signs nonetheless.
Nm
JJMt said:
How are the sand companies doing, or is to early in the recovery for that?
Too early but if I was a frac company, I'd be hoarding sand companies.
I talked to a service company analyst who has been focusing on sand lately. He said sand will get more expensive, but he doesn't think there will be a shortage. He said there are plenty of sand mines that have been idled because of weakness in demand. I think he said at $.06/lb just about all mines are economical. He said the most economical mines are producers at $.03/lb. In summary, there's lots of spare production capacity out there.
I work for a sand company and we are completely sold out of 40/70 as our almost all of our competitors. There is plenty of idled sand, but the issue is it's either non economical at current pricing or it's too coarse. In 2014 everyone wanted 20/40 so when mines were being built they were almost always on a coarse deposit. Now everyone is using a slickwater design with 40/70.
Every E&P and most service companies we have talked to are worried about supply and are taking steps to ensure they have it, including accepting price increases.
TxAg does your number include cost to the wellhead? $.06 or even $.03/lb is an extremely high cost for just the sand and I know no one is getting that good of pricing out of the mine.
Every E&P and most service companies we have talked to are worried about supply and are taking steps to ensure they have it, including accepting price increases.
TxAg does your number include cost to the wellhead? $.06 or even $.03/lb is an extremely high cost for just the sand and I know no one is getting that good of pricing out of the mine.
Sand will become a bit of a nuisance in the coming months if activity continues to climb. Particularly in areas like the Permian. While supply at the mine may not be in a true immediate danger of a shortage, the ability to get to location provides other headaches. Rail access/cars/storage and then my ultimate hatred...trucking will begin to show signs of stress.
In my opinion, what will be felt first amongst service co and operators will be an increase in the trucking costs. Trucking companies will leverage the uptick for increases in services quickly. Interestingly enough several large sand companies are looking into the delivery option as part of their service. I know that Hi-Crush obtained the "sand box" style trucking and delivery style which I have used on a few jobs and was satisfied.
The sand suppliers have typically forecast for the current flavor which as Mavs mentioned has shifted year to year. 100-Mesh was the hot item there for awhile followed by a re-focus on 40/70 and 20/40. 3 years ago 30/50 was increasingly difficult to obtain in large quantities especially if you had exhausted your contracts.
Randomly, there were a ton of requests for Brady Sand a few months back and that supply was increasingly difficult to guarantee.
This opens the doors for "brokers" another pain in the ass. I dealt with one in particular who wound up being sued because he sold the same tonnage to 3 other large service companies. I opted out of the sale (thank goodness) once he could not provide legitimate documentation. (He provided what I felt were fraudulent lab results).
While mines ramp up production, some operators will ultimately have to evaluate "inferior" proppants that may not be what they are ultimately used to.
In my opinion, what will be felt first amongst service co and operators will be an increase in the trucking costs. Trucking companies will leverage the uptick for increases in services quickly. Interestingly enough several large sand companies are looking into the delivery option as part of their service. I know that Hi-Crush obtained the "sand box" style trucking and delivery style which I have used on a few jobs and was satisfied.
The sand suppliers have typically forecast for the current flavor which as Mavs mentioned has shifted year to year. 100-Mesh was the hot item there for awhile followed by a re-focus on 40/70 and 20/40. 3 years ago 30/50 was increasingly difficult to obtain in large quantities especially if you had exhausted your contracts.
Randomly, there were a ton of requests for Brady Sand a few months back and that supply was increasingly difficult to guarantee.
This opens the doors for "brokers" another pain in the ass. I dealt with one in particular who wound up being sued because he sold the same tonnage to 3 other large service companies. I opted out of the sale (thank goodness) once he could not provide legitimate documentation. (He provided what I felt were fraudulent lab results).
While mines ramp up production, some operators will ultimately have to evaluate "inferior" proppants that may not be what they are ultimately used to.
I believe some people mentioned in November that Weatherford was doing another round of cuts. I was told that today they did a 6000 head count reduction. I know some of the cuts were in their IT department.
Probably a preemptive strike to keep investors somewhat complacent after they deliver a poor quarter
We're paying $0.072/# for all white sand except 40/70 FOB Midland. We're buying 40/70 white for $0.0756/# FOB Midland. I assumed $.03 was what the mine is selling for.
Given the expectation for a tightening of the sand market, particularly in the Permian, is the consensus that water availability will also become a problem in certain areas?
Quote:Quote:
We're paying $0.072/# for all white sand except 40/70 FOB Midland. We're buying 40/70 white for $0.0756/# FOB Midland. I assumed $.03 was what the mine is selling for.
Dang, that's pricey. Market pricing is ~$.015 FOB the mine and $.045 FOB Midland.
Goose06 said:
Given the expectation for a tightening of the sand market, particularly in the Permian, is the consensus that water availability will also become a problem in certain areas?
IMO fresh water will be the biggest issue moving forward. With fracs becoming bigger and bigger the fresh water supply is constantly being put under more and more pressure.
Recycling will need to become a standard for operators moving forward to help reduce this impact.
agreed, seems rather steep...
TxAg20, are you supplying sand yourself or is that the price from the service co?
TxAg20, are you supplying sand yourself or is that the price from the service co?
rdclarke said:Goose06 said:
Given the expectation for a tightening of the sand market, particularly in the Permian, is the consensus that water availability will also become a problem in certain areas?
IMO fresh water will be the biggest issue moving forward. With fracs becoming bigger and bigger the fresh water supply is constantly being put under more and more pressure.
Recycling will need to become a standard for operators moving forward to help reduce this impact.
This, especially in the Permian.
We're buying through a service company. That pricing is locked through March. I just looked at an invoice to get that pricing. We bid out several frac companies for 3 fracs a month. That was the cheapest bidder, so maybe they're sticking it to us on sand and giving us a deal on horsepower or chemicals.
I would agree with this. I work in Supply Chain for a Big 3 OFS provider and we have seen a decrease of 51% in our cost per mile for trucking in the Permian from 2014 year average over the last two years. It was down 38% for 2015 over 2014 and saw the further redux of 13% this year.aggielee03 said:
In my opinion, what will be felt first amongst service co and operators will be an increase in the trucking costs. Trucking companies will leverage the uptick for increases in services quickly. Interestingly enough several large sand companies are looking into the delivery option as part of their service. I know that Hi-Crush obtained the "sand box" style trucking and delivery style which I have used on a few jobs and was satisfied.
Just as a comparison, we pay $0.0421/# for 100 mesh through our frac service provider. Granted, this is for work in Appalachia not Permian. I feel like the Permian branch at our company always pays a "Permian Premium."TxAg20 said:
We're buying through a service company. That pricing is locked through March. I just looked at an invoice to get that pricing. We bid out several frac companies for 3 fracs a month. That was the cheapest bidder, so maybe they're sticking it to us on sand and giving us a deal on horsepower or chemicals.
couldn't agree more
All horizontal wells?
Kind of interesting how little "business " reaction to that marxist use of the 1953 law to ban drilling in so much of offshore America. Most of the reaction is political.
Could it be that there is a quiet realization that , thanks to the miracles in the onshore side and the massive cost of deepwater, the future of insanely expensive yuge offshore deepwater is very much in doubt ? I've been saying for a couple of years that deepwater is not a very bright prospect going forward. Far too expensive and dangerous. Waaaaaay to much recoverables on land.
What say y'all ?
Could it be that there is a quiet realization that , thanks to the miracles in the onshore side and the massive cost of deepwater, the future of insanely expensive yuge offshore deepwater is very much in doubt ? I've been saying for a couple of years that deepwater is not a very bright prospect going forward. Far too expensive and dangerous. Waaaaaay to much recoverables on land.
What say y'all ?
Guess I should turn the keys to my house in to the bank now then.
I don't think we'll see as many small projects offshore as we saw in past.
I do however think we will see lots of infill projects that weren't important before and all the big projects that typically take place. They are still too productive and cash positive to ignore. The wildcard will always be the independents. They don't have the same high overhead, unneeded specifications the big boys do that got the cost of offshore projects where it is. Couple that with cost reductions of 30-40% from the EPC side and it still has a future.
Surface will always lead the way regardless since just about any idiot can lease and drill a well. The one thing offshore has in its favor is that isn't the case and costs can be controlled when they want to do so.
I do however think we will see lots of infill projects that weren't important before and all the big projects that typically take place. They are still too productive and cash positive to ignore. The wildcard will always be the independents. They don't have the same high overhead, unneeded specifications the big boys do that got the cost of offshore projects where it is. Couple that with cost reductions of 30-40% from the EPC side and it still has a future.
Surface will always lead the way regardless since just about any idiot can lease and drill a well. The one thing offshore has in its favor is that isn't the case and costs can be controlled when they want to do so.
Offshore wells are huge producers. No way that will ever go away. Just like land drilling, the technology will get better and they will be more efficient in the long run. It is dangerous, but not as dangerous as you think. The BP accident was the first of its kind will all the hole punched in the GOM. One time thing and everyone starts running to the cliffs as if it is a normal everyday occurrence. Offshore will bounce back in late 2017 and early 2018. Too much money to be made to do nothing...
The Original AG 76 said:
Kind of interesting how little "business " reaction to that marxist use of the 1953 law to ban drilling in so much of offshore America. Most of the reaction is political.
Could it be that there is a quiet realization that , thanks to the miracles in the onshore side and the massive cost of deepwater, the future of insanely expensive yuge offshore deepwater is very much in doubt ? I've been saying for a couple of years that deepwater is not a very bright prospect going forward. Far too expensive and dangerous. Waaaaaay to much recoverables on land.
What say y'all ?
I saw the headline and kinda wondered how long it would last. If Obama can all of a sudden use a law from the 50's to ban something, should be possible for a new administration to decide that the interpretation we have had for the last 60 years is more correct than the latest scheme by the Obama administration to stand in the way of the fossil fuel industry.
Yep. Libs should be ****ting their pants over the thought of Trump wielding the kind of executive power Obama has for the past 8 years. He set an extremely dangerous precedent.
Quote:
Offshore wells are huge producers. No way that will ever go away. Just like land drilling, the technology will get better and they will be more efficient in the long run. It is dangerous, but not as dangerous as you think. The BP accident was the first of its kind will all the hole punched in the GOM. One time thing and everyone starts running to the cliffs as if it is a normal everyday occurrence. Offshore will bounce back in late 2017 and early 2018. Too much money to be made to do nothing...
I agree that the GOM can punch large holes in the ground and get oil out. But I would argue some of their cost competitiveness is the fact there are lots of other rigs/platforms around. Does the Arctic have the same or similar infrastructure to handle production?
I have seen that you could use the Congressional Review A(something; CRA) to look at regulations that are imposed. But there is a 60 day window to look at them and roll them back. While you would think that Congress could do it (I think it only takes a simple majority), only once has it been used in the past 10+ years (from my basic, cursory search).BiochemAg97 said:The Original AG 76 said:
Kind of interesting how little "business " reaction to that marxist use of the 1953 law to ban drilling in so much of offshore America. Most of the reaction is political.
Could it be that there is a quiet realization that , thanks to the miracles in the onshore side and the massive cost of deepwater, the future of insanely expensive yuge offshore deepwater is very much in doubt ? I've been saying for a couple of years that deepwater is not a very bright prospect going forward. Far too expensive and dangerous. Waaaaaay to much recoverables on land.
What say y'all ?
I saw the headline and kinda wondered how long it would last. If Obama can all of a sudden use a law from the 50's to ban something, should be possible for a new administration to decide that the interpretation we have had for the last 60 years is more correct than the latest scheme by the Obama administration to stand in the way of the fossil fuel industry.
My take from the law was that the President can list lands that are off-limits. But there is no provision for taking them off the list. Another angle of issues is that a lot of the lands are home to endangered species, so if the lands are removed (assuming the law or Congress goes that way), I could see a legal battle forming on that front.
Another thought from reading a few other sites is the US Navy. Drilling on the East Coast would/could put a crimp in the Navy's practice field. I have talked to previous Navy guys and while they did things in the GOM, they tended to stay away. Might have been more due to Cold War and such, but if drilling starts taking place in "traditional" practice zones, I could see the Navy (or Coast Guard) making noises.
I guess I figuredif the prices starts going back up, in ways which would make Arctic/Atlantic drilling profitable, why wouldn't ND or other basins coming back into play in roaring fashion? Infrastructure already there (barring pipeline leaks and Indian tribes) and less of an issue with ecological zones.
~egon
Your mention of the US Navy raises an interesting issue. I haven't looked into the 1950s law, but protecting the land because of ecological issues could lead to environmentalists fighting against the navy's use of sonar in the area.
Getting a bit off topic, but a potential unintended consequence.
Getting a bit off topic, but a potential unintended consequence.
Offshore is not going away. There will be a period of adjustment coming out of this crash and companies will have to understand how to bring projects online at a lower cost.
Shell is working on Appo and has another project to danction in late 17/18.
BP will sanction MD2 early next year
Anadarko has Shenandoah in the pipeline.
Other discoveries are out there waiting to be developed as well.
Exxon has a billion barrel field in Liza off the coast of Guyana. Not even mentioning Brazil, West Africa, Norway.
If we are talking the U.K. North Sea I would be a bit more pessimistic.
Shell is working on Appo and has another project to danction in late 17/18.
BP will sanction MD2 early next year
Anadarko has Shenandoah in the pipeline.
Other discoveries are out there waiting to be developed as well.
Exxon has a billion barrel field in Liza off the coast of Guyana. Not even mentioning Brazil, West Africa, Norway.
If we are talking the U.K. North Sea I would be a bit more pessimistic.
tommyjohn said:
Offshore is not going away. There will be a period of adjustment coming out of this crash and companies will have to understand how to bring projects online at a lower cost.
Shell is working on Appo and has another project to danction in late 17/18.
BP will sanction MD2 early next year
Anadarko has Shenandoah in the pipeline.
Other discoveries are out there waiting to be developed as well.
Exxon has a billion barrel field in Liza off the coast of Guyana. Not even mentioning Brazil, West Africa, Norway.
If we are talking the U.K. North Sea I would be a bit more pessimistic.
In addition to those listed above:
Hess Stampede - Gulf of Mexico
Noble Leviathan - Offshore Israel
Statoil Peregrino 2 - Offshore Brazil
Shell Vito - Gulf of Mexico
And that's just the upcoming ones I'm aware of in addition to the others listed above.
They may not be online yet, but as far as EPCs are concerned those are already done.
Appo is the only one on that list that is about done from an EPC standpoint.
We will see how many of those get sanctioned / called off over the next few years though, my guess is less than half
We will see how many of those get sanctioned / called off over the next few years though, my guess is less than half
HESS Stampede is ahead of Appo. I know because I'm working on it. Those will be coming online in the next two years respectively
Comeby! said:rdclarke said:Goose06 said:
Given the expectation for a tightening of the sand market, particularly in the Permian, is the consensus that water availability will also become a problem in certain areas?
IMO fresh water will be the biggest issue moving forward. With fracs becoming bigger and bigger the fresh water supply is constantly being put under more and more pressure.
Recycling will need to become a standard for operators moving forward to help reduce this impact.
This, especially in the Permian.
Which will add more value to running ball on seat for plug n perf.
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