Survey Demographics

Midcontinent operators are working down the backlog of drilled but uncompleted wells (DUCs), prompting an increase in bid inquires for well stimulation work.

The Midcontinent now joins several other domestic markets featuring a rise in demand for pressure pumping services, according to Hart Energy’s Heard In The Field survey.

Even with demand growing, pricing and capacity remain unchanged in the Midcontinent with 13 crews and roughly 320,000 in hydraulic horsepower (hhp) active in the market. Some of the same fleets frack wells in the Haynesville and Barnett shales as well, though both of those plays are witnessing declining activity.

If oil prices climb to $57 sustained, demand for well stimulation would rise significantly in the Midcontinent, followed by increases in service company pricing.

Survey participants report a blended average $38,000 per stage in the Midcontinent, largely reflecting activity in the Scoop and Stack plays. However, service providers indicate current pricing is still below cash cost and is unsustainable.

Oklahoma completions fell to 1,750 in 2015 from 3,318 in 2014. The run rate for the first half of 2016 dropped further to 370, according to voluntary reporting among operators to FracFocus.

The first-half 2016 numbers are likely to be revived upwards as more operators upload well data.

Watch for the next Heard In The Field report on the Midcontinent well stimulation/pressure pumping market update in October.

Part I. – Survey Findings

Among Survey Participants:

  • Some Demand Growth Quarter-To-Quarter
    [See Question 1 on Statistical Review]
    ​Seven of eight respondents reported demand for pressure pumping services during second-quarter 2016 outpaced demand in the first quarter, a change from the April report when demand was stable at very low levels.
    • Mid-Tier Service Provider: “There are signs that fewer completions are being delayed and demand is gradually improving here.”
  • DUCs Falling
    [See Question 2 on Statistical Review]
    ​Five of eight respondents report the number of DUCs is falling as the price of oil improves and operators turn attention to the backlog. The trend is to complete wells as they are drilled rather than add to the backlog of uncompleted wells.
    • Top-Tier Service Provider: “It no longer makes sense to delay completions as prices stabilize above $50.”
  • $57 Oil, $3.35 Gas Needed For Fracking Demand To Improve
    [See Question 3 on Statistical Review]
    ​Among respondents, a stable oil price averaging $57 and an average natural gas price of $3.34 are required for fracking demand to increase. As demand for pressure pumping increases in the region, many pressure pumping fleets will quit roving from area to area, according to respondents.
    • Mid-Tier Service Provider: “We are all hopeful that the recent price trend shows stability so that demand in the Midcon increases. Optimism is guarded as we watch for those signs.”
  • Operators Strategize Timing For DUC Completions
    [See Question 4a and 4b on Statistical Review]
    ​Among respondents, the time to complete a DUC well averages seven days. Utilizing a multiwell zipper frack approach to those completions will reduce that time per well by an average 12%, according to respondents.
    • Mid-Tier Service Provider: “We complete a DUC well in the average seven days here in the Midcon. A multiwell approach saves about 10% when operators are not delaying most completions.”
  • Hydraulic Horsepower Capacity Estimated At 320,000
    Average estimated hhp in the region is 320,000, similar to estimates made in the April report. About 13 fleets are available to frack Midcontinent wells, same as reported in April. Some of these fleets also frack wells in the Haynesville and North Texas areas, as needed.
  • Midcontinent Well Metrics: Vertical Depth Averages 8,900 Feet, Laterals Average 7,900 Feet
    [See Question 7 on Statistical Review]
    Average vertical depth is 8,938 feet across the area, with most reports originating in the Scoop and Stack plays. Average lateral length is 7,900 feet with an average stage count of 36. Injection rates average 74 barrels per minute with about six stages completed daily on a 24-hour schedule.
  • Average Cost Per Stage: ~$38,000
    [See Question 8 and 9 on the Statistical Review]
    ​The average per stage price is reported at $38,000, similar to findings in April. Nearly all respondents expect prices to inch higher as demand increases.
    • Mid-Tier Service Provider: “Prices will begin increasing slightly as demand increases. Service providers have been losing money at current prices.”

End Survey Findings

Survey Demographics

H A R T E N E R G Y researchers completed interviews with eight industry participants in the well stimulation/pressure pumping service segment in the Midcontinent area. Participants included seven managers or sales personnel with well stimulation companies and one manager for an E&P company. Interviews were conducted mid-to-late June 2016.

Part II. – Statistical Review

Well Stimulation/Pressure Pumping

[Midcontinent]

Total Respondents = 8

[Fracking service providers = 7, Operators = 1]

1. Do you expect demand for pressure pumping equipment to grow, remain the same or shrink this quarter compared to last quarter?

Remain the same:

1

Grow:

7


2. Are the number of DUCs increasing, decreasing or remaining the same compared with three months ago?

Decreasing slightly:

5

Remain the same:

3


3. What oil price (per barrel) and what natural gas price (per thousand cubic foot) is needed for demand for fracking services to improve?

Oil Price

# Of Responses

Gas Price

# Of Responses

$50-$55

5

$3

3

$56-$60

3

$3.01-$4

5

Average $57

8

Average $3.34

8


4a. On average in this formation, how long does it take to bring a DUC online?

6-7 days:

4

7 days:

4

Average:

6-7 days range


4b. Does the time to bring a DUC online differ between wells drilled on a pad vs. a single well?

Yes, batch completion reduces time 12% on each well:

8


5. In your estimation, what is the total hhp in your area?

250,000- 300,000 hhp:

4

301,000-400,000 hhp:

4

Average:

320,000 hhp


6. How many total crews (spreads) do you estimate are active in the area?

10-12:

2

13-15:

6

Average:

13 crews


7. What is the average vertical drilling depth, average horizontal lateral length, number of frack stages and injection rates (barrels per minute) in this play? What are the average frack stages per day? Is this a 12-hour or 24-hour shift?

Focus On Scoop/Stack Plays

Average vertical depth:

8,938 feet

Average horizontal lateral length:

7,938 feet

Average number of frack stages:

36

Injection rates (barrels per minute):

74

Average number of frack stages per day:

6

12-hour or 24-hour:

24-hour

Required hhp to frack a well:

~25,000


8. What is the average cost per stage in your area now?

$30,000-$40,000:

6

$40,000-$45,000 (much wider range given):

2

Average cost per stage:

~$38,000 per stage


9. Do you expect fracking prices to increase, remain the same, or decrease over the next three months?

Remain the same:

1

Expecting increase:

7


End Statistical Survey