July ReFrac Report – Permian Basin Style

July Update

Primary Vision has been working hard to improve our ReFrac report offering.  We’ve added some additional charts for you focused on the Permian Basin, changed some charts that were hard to read, added a printable version, upgraded our delivery method from an attachment to a link, etc. etc.  A lot of changes that required a lot of testing and we’re not gonna stop there.  Look for us to add in additional analytics, chemicals and production before the end of the year.

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Refrac’ed Wells from 2011-2015 Year To Date

side note: We’re also looking to add an account based system as well as additional reports (hint: Frac Fleet report)

In addition to our reports, we’re going to soon be adding production data, additional completions data and making our trek to the great white north (yes, Canada)!  All a part of the continued evolution of our comprehensive U.S. frac data products.

Survey Forthcoming

Some time this week we’re going to release a survey on our refrac report and a bit about what’s important to you frac data-wise.  Should be super easy, ten questions or less.  Thanks in advance!

Shameless Plugging

Still thinking about ordering our Granular ReFrac Report?  Get July’s instantly and be setup for August where we’ll focus on the Barnett and maybe one additional surprise. You’ll have to subscribe to find out!

How to Subscribe:

You can order here for just $99 (or jump on our soon to change yearly pricing of $899) that is packed with 30+ pages of information including…
Number of ReFrac’ed Wells by Quarter, Region, Orientation and Trajectory
– 
Updated from June!
ReFrac’ed Wells by Year by Top 10 Operator (ALL and HZ wells separately)
– Updated from June!

ReFrac’ed Wells by Year by Service Company (ALL and HZ wells separately)
– Updated from June!

Average Proppant Mass by Proppant Type (ALL and HZ wells separately)
– Updated from June!

ReFrac’ed Wells by Year by Proppant Type (ALL and HZ wells separately)
– Updated from June!

Proppant Mass Comparison Between Original and Second Frac (ALL and HZ wells separately)
- Updated from June!
Heat maps for Re’Frac wells for each year
- Updated from June!
Additionally we drilled down into the Permian Basin in July, so additional slides focused on that region are included.

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2011-2015 Permian Basin Heat Map of refracs

Summer is half way over, get outside!

Primary Vision Team

ReFrac Report Redux & Eagle Ford Drill Down

Updates, Refracs and Future

The rig count has gone up for the first time in 2015 and more permits were issued last week than in any week since February. Good news?  Kinda!

The grass is fairly green here as we move past the half way point of 2015 and boy is the refrac market heating up!

According to Forbes “1 in 2″ frac’ed wells in the United States are candidates to be refrac’ed.

According to our frac records that is almost 50,000 candidate wells!

Halliburton and Schlumberger seem to be gearing up technically and financially to make a big splash into refracs in the second half of 2015.

Let that sink in a second…

Where are the candidate wells?  
What operators are testing and what operators are ready to turn the refrac machine on?  
How much proppant is being used in those refracs?
What is the chemical system that is being used?  
What is the secondary frac chemistry?

All of these questions have been asked to Primary Vision in the last month! We can help you and your team learn more about the buzzy topic, so lets get started with our June report right now.

You can order here for just $99 (or jump on our soon to change yearly pricing of $899) that is packed with 30+ pages of information including…

Number of ReFrac’ed Wells by Quarter, Region, Orientation and Trajectory – Updated from May!
ReFrac’ed Wells by Year by Top 10 Operator (ALL and HZ wells separately) – Updated from May!
ReFrac’ed Wells by Year by Service Company (ALL and HZ wells separately) – Updated from May!
Average Proppant Mass by Proppant Type (ALL and HZ wells separately) – Updated from May!
ReFrac’ed Wells by Year by Proppant Type (ALL and HZ wells separately) – Updated from May!
Proppant Mass Comparison Between Original and Second Frac (ALL and HZ wells separately) – Updated from May!
Heat maps for Re’Frac wells for each year – Updated from May!
and we drilled down (all puns intended) into The Eagle Ford as well as made our prediction on total refracs for 2015.

Next month we’ll cover the Permian Basin and soon be releasing our second report based around pressure pumpers. Things are getting exciting!

Want to get on the early bird list for that? Email me at mjohnson@pvmic.com

Introducing: The Primary Vision National & Granular ReFrac Report

Refracturing treatments (“refracing”) has the potential to have major impacts for operators, oilfield service companies, and their suppliers. Initial evidence indicates refracing can reduce average cost per barrel of oil when used on top candidate wells. There is still a lot of experimentation and technology being developed in this space that will continue to improve returns, and provide a strong market for those companies with appropriate technologies.

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This topic has been super hot lately.  Are operators seriously considering refracs?  What service companies are involved?  What basins have historically been refrac’ed?

Our National ReFrac Report is free and our Granular ReFrac Report is $99 per month (or $899 per year) via subscription here.

Included in our Granular Report:

Number of ReFrac’ed Wells by Quarter, Region, Orientation and Trajectory
ReFrac’ed Wells by Year by Top 10 Operator (ALL and HZ wells separately)
ReFrac’ed Wells by Year by Service Company (ALL and HZ wells separately)
Average Proppant Mass by Proppant Type (ALL and HZ wells separately)
ReFrac’ed Wells by Year by Proppant Type (ALL and HZ wells separately)
Proppant Mass Comparison Between Original and Second Frac (ALL and HZ wells separately)
Heat maps for Re’Frac wells for each year

What would you like to see in our reports?  Do you need a custom report?  Are you interested in purchasing a subscription in bulk for your company?

Contact us at info@pvmic.com if you have questions.

COMING SOON
We’ll dig deeper into the Eagle Ford Region ReFracs
Production Correlations
Predictive Analysis
& More

2014 – Q4 Shows 6% Increase In Frac Water Volume Over Previous Quarter. Feb 2015 Primary Vision US Frac Water Index Update

We saw a 6% increase in 2014 – Q4 over 2014 – Q3 in average frac water volumes. It will be interesting to see if this trend continues with recent oil price declines.

Here is the latest update to the Primary Vision US Frac Water Index. You will notice some slight differences from last time we published. We have updated our methodology to give a more accurate representation of average frac water volumes in the region.

Quarter    Index
2011-Q1    100.0
2011-Q2    97.3
2011-Q3    98.4
2011-Q4    93.1
2012-Q1    89.4
2012-Q2    89.5
2012-Q3    87.6
2012-Q4    96.2
2013-Q1    101.5
2013-Q2    103.4
2013-Q3    108.7
2013-Q4    117.1
2014-Q1    129.6
2014-Q2    140.1
2014-Q3    147.9
2014-Q4    156.4

Frac Water Trends in the United States

Frac Water Trends in the United States

Have questions about our methodology or about Primary Vision’s products and services? Reach out to us here: info@pvmic.com and one of our advisors will reach back to you.

Marcellus Shale Market Trends Part 1: Natural Gas Prices & Frac Activity

In today’s post, we discuss natural gas prices, frac activity levels, and some recent acquisitions and divestments in the Marcellus.

Natural gas prices at some market hubs in the Appalcahian Basin have been trading at negative differentials relative to spot prices at the Henry Hub, considered the “New York Stock Exchange of Natural Gas.” This has been driven by a supply glut and take-away pipeline capacity constraints. Natural gas production from the Marcellus shale has increased from approximately 5.0 Bcf/day in January 2012 to roughly 13.6 Bcf/d at present, according to research from EIA’s Natural Gas Weekly Update illustrates.

Marcellus Shale Natural Gas Production (January 2012 - October 2014)

Marcellus Shale Natural Gas Production (January 2012 – October 2014)

Sources: Primary Vision; EIA

Take-away pipeline capacity, especially in Northern Pennsylvania, was unable to keep pace with rising production. The divergence of spot prices can be traced back to mid-2012. Several new interstate and intrastate pipeline projects in different stages of development will deliver natural gas flows to other markets, including the Southeast US. These developments should mitigate the supply backup that has exerted downward pricing pressure. An exception to these regional market dynamics has been the TCO Pool, one of the Appalachian hubs where pricing has kept close parity to Henry Hub prices due its ability to back out deliveries from Gulf Coast sources and its pipeline connections that provide access to several markets.

Marcellus Shale Natural Gas Pipelines and Market Hubs

Marcellus Shale Natural Gas Pipelines and Market Hubs

Natural Gas Prices Marcellus Hubs

Natural Gas Prices – Marcellus Hubs (April – October 2014)

Sources: EIA

Facing these challenging dynamics, certain operators have decreased activity levels during 2014 relative to 2012 and/or 2013 levels, including Chesapeake (as further detailed below), XTO/ExxonMobil, EOG Resources, EXCO Resources, and WPX.

On the other hand, certain E&Ps have stepped up or maintained strong frac activity levels, including Southwestern Energy, Antero Resources, EQT, CONSOL Energy, Noble Energy, Talisman, Seneca Resources, and Rex Energy. Indeed, Southwestern Energy recently announced a $5.375 billion agreement with Chesapeake Energy to acquire 413,000 net acres in West Virginia and southwestern Pennsylvania targeting natural gas, natural gas liquids, and crude oil in the Upper Devonian, Marcellus, and Utica. The deal also includes 256 operated and 179 non-operated wells, or 435 total wells, with a net production of 336 MMcfe/d (55% gas, 36% NGL, 9% oil).

Royal Dutch Shell, which has been reshuffling its US Land unconventional oil and gas portfolio in an effort to shore up its balance sheet, has announced a few transactions of late in the Appalachian Basin. Rex Energy acquired 208,000 gross (207,000 net) acres from Shell in a deal announced on August 12, 2014. The $120 million all-cash transaction added significantly to Rex’s asset base in a liquids-rich area covering Armstrong, Beaver, Butler, Lawrence, Mercer and Venango counties in western/southwestern Pennsylvania and Columbiana and Mahoning counties in northeastern Ohio. Two days after details of the transaction with Rex were made public, Shell announced two separate transactions, including a “swap” with Ultra Petroleum. The deal with Ultra involves Shell selling its 100% interest in conventional natural gas assets in the Pinedale Anticline in Wyoming in exchange for 155,000 net acres in the Marcellus and Utica as well as $925 million cash. Interestingly, the Supermajor describes these newly-acquired assets in northcentral Pennsylvania as “highly attractive exploration acreage” rather than clearly-delineated development acreage. The second transaction announced involves Shell selling 100% of its Haynesville shale assets in Louisiana, including associated field facilities and infrastructure, to Vine Oil & Gas LP and its financial sponsor, the Blackstone Group, for $1.2 billion. Shell appears to simultaneously be demonstrating its belief in the long-term value proposition of the Marcellus and Utica, but appears more inclined to focus on dry gas production instead of what may be for the operator less economic wet gas production. Either way, Shell’s well construction costs in the Appalachian Basin are certainly lower than in its recently-divested dry gas Haynesville assets. It will be interesting to see how Shell’s plans and regional natural gas prices will affect its medium- and long-term returns.

Similar to major basins across US Land, many operators active in the Marcellus have managed to bring well costs down due to increased drilling and completion efficiency, driven primarily by the more common practice and larger scale of multi-well pad operations. E&Ps have also managed to exert pricing leverage on vendors, particularly frac services providers that are competing in a market oversupplied with pressure pumping capacity. Recent commodity price weakness has been well-document in the news, but operators such as Occidental Petroleum and oilfield service providers such as Halliburton remain optimistic and report that activity levels recently have not materially changed.

In Part 2 of our analysis on the Marcellus, we will discuss proppant market trends. Stay tuned!