I see a lot with what I do for a living. That is a true statement, however, there is never a shortage of new stories or techniques...lol.

Cyp0111 said:

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I see a lot with what I do for a living. That is a true statement, however, there is never a shortage of new stories or techniques...lol.

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No doubt. There's always a next big thing.

aggie028 said:

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I haven't talked to anyone that is drilling without completing on purpose. Have seen several analyses showing DUCs increasing at a normal rate but seems plausible there might be a slight frac bottleneck slowing them down a hair.

Have either of you heard of anyone doing it because of pricing or are you just speculating? Near end of year, many will increase ducs and complete early next year due to budgets running out and their promise to the street they will hit budget.

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This is my thinking as well. I was leaning towards a bottleneck. Certainly some vertically integrated Permian players won't have an issue with bottlenecks, but my guess is that other companies are having issues keep up with the drilling rigs. But I'm further from the Permian than you guys so I'm just speculating.

Anyone going to the URTeC conference in Austin next week?

Frac fleet availability in Permian is definitely an issue. As of 2 months ago when we put out for bids, several were already saying they were booked solid through the end of 2017

I've been told pro Petro is booked through 2017.

I work for a large red service company and can confirm fleets are in short supply right now.

Personnel must be the issue... right?

There's a lot of frac iron out there laying around that can be put back in service.

I think we are in self regulating mode right now. Wev'e learned how to make money in several areas at sub 50 pricing and so the activity picks up, oil prices drop because of oversupply and the cycle repeats. Without an increase in worldwide demand I don't know how that cycle gets broken. We need Asia to catch on fire again economically imho.

Personnel certainly are, but pumping equipment is as well. Our manufacturing center in Duncan, OK was handed some pretty ambitious targets to hit to support 2017 operations due to how much equipment had been mothballed.

I think frac companies need a little more price stability before they bring too much back online. Seeing big price increases the last 6 months and short notice spreads being 25% higher than the contracted ones.

I think they are bringing on as much as they possibly can. Just like operators, we don't self regulate as an industry. Free market.

Coming from a supply chain perspective, this is certainly true. The way I understand it, the business asked manufacturing how many they could build then said add 25% to that and that's your H2 plan.

On the personnel side, I also had a field supervisor (i believe it was at a large blue provider) tell me that the biggest bottleneck would be crew training because due to corporate policy, even if he could go out and rehire all his old crews, they would still have to go through the whole 6 month training program as a "new-hire"delaying any kind of ramp up accordingly.

Fishing for contacts here... I am trying to move a sizable ORRI in Reeves County, Texas in an area that is within the hottest part of 2017 leasing in the Permian (per Drilling Info lease activity heat map). The ORRI averages 6.4% over two sections (~82 net mineral acres) about 11 miles west of Pecos. There is a new horizontal permit within 2 miles of the acreage and many more beyond in all directions. Leases are currently held by production by older vertical wells. Does anybody know who might be interested in acquiring this interest? Can't be too many ORRIs of this size floating around out there. PM me if you have any leads that you want to share. Thanks and Gig 'em!

Sent you an IM. I would be interested in taking a look.

BourbonAg said:

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Sent you an IM. I would be interested in taking a look.

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I sent you an email and an IM.

Thanks.

Also sent a PM.

NM

Anyone in here in procurement/purchasing that buys organoclay? Got a question that I'm hoping to get some assistance with.

Thanks

jetch17 said:

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Anyone going to the URTeC conference in Austin next week?

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Planning on it.

GarlandAg2012 said:

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Gordo14 said:

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This article might explain the drop in oil output per rig, for anybody still interested. If this is actually how the metric works, it seems like output per frac crew is the only useful metric (I.e. the output per rig decline is driven by supply chain issues - like access to frac crews - seen in the rising DUC count in the Permian)

https://www.bloombergquint.com/opinion/2017/07/19/opec-oil-price-hopes-must-face-u-s-shale-ducs

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Do you think the rise in DUCs is due to fleet availability or operators choosing to frac wells when they'll be more economic?

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I'd wager a good portion of them are simply due to fleet availability, tools, and personnel.

Id agree with you. Frac companies are working to put out fleets but are still somewhat gun-shy when it comes to big expenditures required to get equipment back up. So many of the spreads were harvested during the downturn to avoid large repair costs. Those that are spending to get equipment back up are seeing that it is taking a little longer than otherwise normal due to the bottleneck with vendors (remember they slowed down manufacturing as well).

I think I saw somewhere that the US is still about 6 million HHP under demand right now. That is a substantial number for sure.

Frac hands are the biggest squeeze right now. Cudd and Big Blue have plenty of frac equipment, but no extra hands. The companies that don't have additional equipment are also having labor problems. It's tough to order new equipment when you can't hire enough to operate the equipment you have.

agreed, lack of labor is killing some right now. Plus just the time needed to train new guys up. Big blue is diligently working to get equipment out. They are still lacking and needing equipment big time. I think all of the frac operators are doing large hiring events to fill their number gaps.

I'm not sure what they're making, but I'm guessing low to mid 100s. The crews we use work 12 hours on 12 hours off, but they get paid 14 hours per shift. No guaranteed days off. They've been going without a day off 24 days today.

Probably around $15-$24 per hour based upon experience. Depending upon the company 14 hrs per day is generally the norm while working 6/3 schedules or even 14/7.

aggielee03 said:

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Probably around $15-$24 per hour based upon experience. Depending upon the company 14 hrs per day is generally the norm while working 6/3 schedules or even 14/7.

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Disconnect in the #s between you and TxAg20...

What are the chances that a company with one or two frac operations (a day or two each) could get a frac spread to even show up?

Not really a disconnect on the numbers. We are essentially saying the same thing in different ways.

The crews are running a lot of hours and days and I am sure that many are cancelling days off to keep the schedules full.

It really depends on the region as far as availability. Its been awhile since I looked but a of Service Cos had moved assets from other areas down to the Permian bc of the increased activity. The small fracs (assuming that is what you are mentioning) are probably difficult to get on the schedule bc they simply aren't the high dollar horizontal stuff that people are going after.

the disconnect is if by "low to mid 100s" he means in the 100k-150k range. because with the numbers you gave, even if a hand worked 14hrs per day 365 days in a year, their range would be 76,650-122,640. based on a 14/7 schedule, the range should be about 51-81

buffalo chip said:

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aggielee03 said:

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Probably around $15-$24 per hour based upon experience. Depending upon the company 14 hrs per day is generally the norm while working 6/3 schedules or even 14/7.

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Disconnect in the #s between you and TxAg20...

What are the chances that a company with one or two frac operations (a day or two each) could get a frac spread to even show up?

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I'm guessing they make $18-$30/hour, 98 hours/week. I'm not sure of hourly pay for frac hands, but I've talked to a cementer who recently started (with no experience) at $18/hour and got bumped to $21/hour 3 weeks later after getting his CDL. He said he will get bumped to $25/hour after 6 months on the job. I assume frac pays at least as well as cement.

Also, the companies we've used for frac'ing are basically no days off. The crews will get time off if they're down waiting for water or sand.

Vertical wells with 6 to 12 stage fracs is what I am working on. In the past (pre-2015) I would bid out the work and then get on one company's schedule for a window in their frac work for the horizontal clients. If a window came up, I had to jump on it or get in line for the next window. This is an incredibly inefficient way for a small company to run its business (on somebody else's schedule...). It is what it is, though.