The Primary Vision US Proppant Mass Index

Back in February we launched our US Proppant Mass Index, if you didn’t see it you should check it out here. In brief, the index measures the average proppant mass used in a frac treatment across all US wells. When we published this last, we gave you information up to and including Quarter Four / 2014.

2011 – Q1 100
2011 – Q2 99
2011 – Q3 100
2011 – Q4 98
2012 – Q1 91
2012 – Q2 89
2012 – Q3 93
2012 – Q4 102
2013 – Q1 103
2013 – Q2 106
2013 – Q3 108
2013 – Q4 117
2014 – Q1 131
2014 – Q2 145
2014 – Q3 158
2014 – Q4 172
2015 – Q1 194
2015 – Q2 209
2015 – Q3 219

As we pointed out back in February, we were seeing an increase and its continued to increased quarter over quarter since.

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We can provide a similar index based on our user’s requirements. Example Analysis: horizontal wells only, vertical wells only, directional wells only, by operator, by service company, by region or a combination of them all.

Please contact us for more information about these indexes, or if you have any questions about our capabilities, services, or products.

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 2: Is Average Proppant Mass Still on the Rise?

In our last post, we discussed a variety of factors that have influenced frac activity levels in the Marcellus shale, including continually rising natural gas production levels, basis differentials at regional market hubs relative to Henry Hub natural gas spot prices, and pipeline takeaway constraints. Reduced drilling and completion (D&C) activity by certain operators has been offset by increased activity by others. That said, there is little doubt that D&C activity would be more robust were it not for these factors. We also took a look at some notable acquisitions and divestments in the Appalachian Basin, the most notable of which was Southwestern Energy’s acquisition from Chesapeake Energy of 413,000 net acres and 435 wells with net production in September 2014 of 336 MMcfe.

Today, we delve into well completion designs that have been used in efforts to optimize well performance and what implications it has had for proppant use. In particular, we focus on 16 leading E&Ps active in the Marcellus.

With E&Ps in full-scale well manufacturing mode in the Marcellus, emphasis has shifted to increased operational efficiency to bring down or, at the very least, contain well construction costs. But just as we see across several oily basins, operators targeting both liquids-rich and dry-gas zones of the Marcellus (and Utica) shale have continued to fine-tune well and frac designs to optimize well performance.

In an effort to increase EURs and produce wells to their maximum potential, E&Ps in the Marcellus have been: 1) drilling increasingly longer laterals; 2) improving lateral placement in the reservoir; 3) increasing frac stage counts per well; 4) using shorter stage lengths (SSL) and reduced cluster spacing (RCS) completions (tighter spacing between stages and more perforations or “perfs” per lateral). RCS completions were first adopted in the Marcellus, and operators have been using the technique since early-2012. As Credit Suisse has suggested, RCS completions have become “almost universally adopted in the Marcellus.” Operators are more commonly evaluating well costs and economics based on per-lateral-foot basis.

In April 2012, Range Resources announced that 2 wells using RCS completions produced at twice the initial production rate (IP-rate) as compared to non-RCS wells on the same well pad. In September 2013, Antero Resources commented that using RCS frac designs in 17 liquids-rich Marcellus wells resulted in incremental frac costs that averaged 20% higher than previous designs ($2 million vs. $1.5 million per well). But the operator saw IP-rates increase by 25-35% compared to similar wells in the area. CONSOL Energy commented that when it first used RCS on two wells in early-2012, IP-rate improvements over non-RCS wells were not meaningful. However, the operator observed that after 15 months of production history, these two wells were 20% and 40% above the type curve, respectively.

What is the implication of all of this for proppant? Longer laterals, SSL/RCS completions, and increased stage counts per well all in isolation lead to increased proppant. But the contemporaneous adoption of all of these practices has led to significant increases in average proppant mass pumper per well.

We categorized 16 publicly-traded operators into peer groups as outlined in the table below. The E&Ps have collectively accounted for approximately 75% of frac activity in the Marcellus since 2012.

Marcellus Top-16 Operators

Notes: XTO Energy operates autonomously as a subsidiary of ExxonMobil and manages US Land upstream operations on behalf of its parent company; E&P categorization reflects that of Raymond James

The proppant mass index presented below uses weighted averages based on the number of wells frac’ed by operators within each peer group. The chart reflects growth of average proppant mass per well using 2011 Q4 as a base of comparison.

Marcellus-Average-Proppant-Mass-Index-12Q1-14Q3

Marcellus Average Proppant Mass Index (12Q1-14Q3)

Sources: Primary Vision

The findings are rather staggering. As a collective, average total proppant mass per well is up 2.3x between 2011 Q4 and 2014 Q3. Our analytics reveal that as a collective group, average proppant mass per well has increased at a 32% CAGR between 2012 and 2014.

As this trend has played out, it has had cascading impacts across the upstream supply chain. After a surge of manufacturing capacity expansion during 2012 and 2013 led to an oversupply and falling pricing, frac sand suppliers have seen significant demand growth bring the market back closer to balance over the past ~12 months and have realized . Proppant logistics have been challenging due to chronic shortages of rail cars and truck-trailers as well as intermittently by weather. During 2014, operators have reported delays scheduling frac due to temporary sand shortages. Certain frac services providers have commented that proppant hauling costs essentially doubled overnight during spring 2014 – sand haulers appeared to be colluding by simultaneously charging a per-truck day rate rather than on a per-load basis. Some frac services providers have rushed to lock in long-term supply agreements with sand suppliers.

Primary Vision’s customers leverage our Big Data solutions to gain meaningful insights on the latest market dynamics and act accordingly. By staying ahead of the curve, they can make data-driven tactical and strategic decisions that help increase their bottom line.