Big Blue: Schlumberger 2016 Q2 Comments and more

Big-Blue-Schlumberger-Q2-2016-Comments-And-More

by Matt Johnson

Last week we covered Halliburton’s (HAL: $43.21) Q2 results and we’ll follow up this week with a similar look into Schlumberger’s (SLB: $81.16) second quarter.

Primary visions database is hyper-focused on frac data, so its important to note that while our comments are about their entire Q2 results our data features SLB’s U.S. pressure pumping activities.

The Good – SLB approved dividends of .50c per share and maintains a positive outlook that we’re at the bottom of a downward cycle.  SLB is the worlds largest oilfield service provider, however they are the second most prolific pressure pumper in the U.S. when analyzing active spreads and total frac jobs. CapEx is expected to stay unchanged at $2.2b. SLB has been aggressive in keeping its margins stable vs. the competition and continues to renegotiate long-term contracts that aren’t financially viable.  Asking never hurts.

WATER VOLUME – SLB was #3 in water usage in 2013, #2 in 2014 and 2015, and so far remains in the #2 spot in 2016.

PROPPANT MASS – SLB was #4 in proppant mass in 2013, #3 in 2014 and #4 in 2015. 2016 is a bit muddy right now, no pun intended, as HAL maintains the #1 spot, yet 2nd through 5th place are tight. We’re paying close attention to this as our clients are hungry for proppant data.

TOTAL NUMBER OF FRAC JOBS – In 2015, SLB firmly held 3rd position with over 1,300 frac jobs. So far in 2016 they have moved up a spot to #2.  See this chart below that highlights SLBs total frac jobs in the last five quarters.

The Bad – SLB suffered Year over Year declines in revenue and net income as the demand for pressure pumping activities contracted.  They suffered impairments of almost $2b and restructuring charges totaling $646mm.

The Ugly – SLB continued to reduce their workforce by 16,000 people through the first half of 2016 which is a total reduction of 40% since 2014. SLB is on pace to have its lowest year of revenues in the last six years.

The two charts below highlight SLB’s frac jobs and spreads, which are great activity metrics.

Note: The Q2 2016 data is incomplete as there is a lag in the data of ~100 days

Note: There is a lag in the data of about ~100 days. We continue to capture new data every single day (Running Frac Spreads = blue) and compliment the data lag with our custom forecasting algorithm (Forecast = orange). If you click on the chart you will better be able to see the chart labels.

Interested in learning more about the Primary Vision Frac Spread Count or what a frac spread is? More information here.

Completing the merger with strategic partner Cameron

SLB merged with a powerful ally in oil and gas equipment manufacturing last year in Cameron.  The realization of this sale was completed in the second quarter of 2016.  Cameron “is a leading provider of flow equipment products, systems and services” to oil and gas and will help move SLB into the next generation of completion and production services.  Cameron already had a strategic alliance with SLB and looks to strengthen that bond to SLBs core business as the companies integrate with one another through the rest of 2016.

Baker Hughes (BHI: $44.07) results are expected this Thursday and will be featured in our next blog.

sources
ReutersSchlumberger posts unadjusted Q2 loss, cut another 8K jobs
Carl Surran of Seeking AlphaSchlumberger posts unadjusted Q2 loss, cut another 8K jobs
Zacks.com from NasdaqSchlumberger (SLB) Q2 Earnings Fall Y/Y on Weak Activity
Liam Denning of BloombergFor Oil’s Future, See Schlumberger

Disclaimer
The data presented above has a margin of error of 5-8% as a result of E&P and/or service company errors or incorrect data filings. Neither the information, nor any opinion contained in this site constitutes a solicitation or offer by Primary Vision or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service.

The Big Red Mothership: Halliburton 2016 Q2 Comments and more

by Matt Johnson

Halliburton (HAL: $44.28) reported its 2016 second quarter results yesterday and things seem to be ok, all things considered.  The majority of this article will focus on their pressure pumping activities in the United States.

The Good:  Halliburton is #1 in multiple categories of U.S. Hydraulic Fracturing.  Their stock has increased over 30% in 2016 and has outperformed their peers.

Being #1 isn’t easy.

WATER VOLUME – HAL is #1 in total water volume (total water used) in 2013, 2014, 2015 and look to stay on top at current activity levels in 2016.
PROPPANT MASS – HAL pumped the most proppant of any service provider in the U.S. over the same three year period.  2016 looks much the same.
TOTAL NUMBER OF FRAC JOBS – In 2015 they fractured the most wells, close to 4,400 in the U.S., almost 3-1 over #2 Baker Hughes who had over 1,600.

The Bad: Revenue decreased 43% year over year (Q2 2015 to Q2 2016).  They posted a loss of $3.2b this past quarter (2016 Q2).

t h e   u g l y: Due to the failed merger that was realized on May 1st, HAL had to pay a $3.5b break up fee to Baker Hughes (BHI: $45.71). Venezuela did not pay $148mm in invoices (however HAL did secure a $200mm promissory, terms were not disclosed in the filing) among other impairment charges that approached $425mm. HAL commented that they’ve laid off 1/3rd of their workforce since late 2014.

Those are some 2016 second quarter highlights, or lowlights, depending on how you look at it.  We took a deeper look into our database of frac jobs (~120k jobs in the U.S. over the last 6 years) to Show hal’s activity by Frac job and frac spread.

Note: The Q2 2016 data is incomplete as there is a lag in the data of ~100 days.

Note: There is a lag in the data of about ~100 days. We continue to capture new data every single day (Running Frac Spreads = blue) and compliment the data lag with our custom forecasting algorithm (Forecast = orange). If you click on the chart you will better be able to see the chart labels.

Interested in learning more about the Primary Vision Frac Spread Count or what a frac spread is? More information here.

HAL REFRACS
We tracked, presented and reported on refracs in the U.S. last year at multiple conferences and quickly determined that HAL was on the forefront of refrac technology.  While producers and pumpers are still learning and realizing the benefits of refracs, HAL made significant strides in technology, technique and candidate well selection in 2015.  We think refracs are in their infancy and will provide a substantial source of revenue for producers and pumpers in the years to come.  HAL committed themselves to a long-term approach to refracs and as a result will stand tall as producers add refrac programs to their future plans.

As rig and spread counts, as well as crude prices, continue to level the market seems to be headed in a positive direction.  HAL has positioned themselves to be the lean and mean red machine that they can and should be.  They commented that even a modest uptick in the second half of 2016 would reap benefits.  Let’s hope they’re right.

Schlumberger (SLB: $80.60) reports their results today, July 21st.  BHI on July 28th.

sources
Kaya Yurieff of The StreetHalliburton (HAL) Stock Higher After Q2 Results Top Estimates
ReutersHalliburton reports $148 mln loss from Venezuela operations
David Wethe of BloombergHalliburton Sheds More Jobs, Looks to North America Recovery
Natural Gas EuropeHalliburton Reports $3.2B Loss in 2Q
Primary Vision Frac Database
Primary Vision Frac Spread Count

Disclaimer
The data presented above has a margin of error of 5-8% as a result of E&P and/or service company errors or incorrect data filings.  Neither the information, nor any opinion contained in this site constitutes a solicitation or offer by Primary Vision or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service.

Frac Spread Count 2.0 – June 2016

by Jake Stevens

Have you prepared for the inevitable?

While a lot of focus is on permits and even the rig count over the last 30 or 40 years, we’ve been distributing a new metric that propelled Primary Vision into the mainstream in the summer of 2015, one we believe is the most important metric of frac activity.  We call it the Primary Vision Frac Spread Count (I might refer to it as the PVFSC or the FSC for the rest of this blog).

A quick summary of what the PVFSC is.  Simply put its a metric for the highest daily value of active frac spreads for a given week.

Ok great, but what exactly is a frac spread.  Well, lets start telling you what it isn’t.  It has nothing directly to do with natural gas prices (the crack spread), natural gas refiners (the fractionation spread) or the value gained from the sale of any natural gas liquid.

Primary Vision knows the who (pressure pumper), where, when, how many, and in most cases what the service providers are pumping, but it doesn’t stop there. We also know for what operators they are pumping for.

To summarize for every frac spread we know the following:

1) Days Active
2) Location
3) Pressure Pumper
4) Operator
5) Volumes of water, proppant, chemicals pumped

This allows us to know the number of active fleets on a given day and allows for the creation of the Primary Vision Frac Spread Count.

We give away for free, updated every week ,the Primary Vision Frac Spread Count National number.  This you can find here. Its updated by 10am every Friday.  Sign up for the free national report and you’ll get an email sent out weekly that includes the historical frac spread data plus the frac spread data for the previous week.  Use the chart and the data as you wish, all we’re asking is that you source us when using the data/image in a commercial capacity.

Its free, and yes you can get started today.

In a few days we’ll highlight what you get with the paid subscription for the Primary Vision Granular Frac Spread Count or you can reach out to us at info@pvmic.com to learn more.

What’s happening at Primary Vision

originalby Matt Johnson

Primary Vision is growing and is looking at 2016 as a year of opportunity.  Here are a few things that have happened and are happening:

We contributed to an article on proppant in HZ fracs just awhile back with BloombergRead that here

We contributed to an end of year report on proppant usage with the Petroleum ConnectionRead that here

We’re speaking about refracs at the forthcoming SPE Hydraulic Fracturing Technology Conference at February 9th to 11th in The Woodlands.
Are you going?  Email me and let’s meet: mjohnson@pvmic.com
More information can be found here

We’re about to release our January Granular and National ReFrac report, you can learn more about that here.

We have finished our most recent round of updating our frac chemical database and boy is it something.  We believe we have the most comprehensive data set on frac chemicals available today.    Interested in seeing a sample?
Contact us: info@pvmic.com

Don’t forget that we’re now going into our 6 month of the Primary Vision Frac Spread Count.  Some interesting things are taking place with our granular frac spread count product in different oil segments.  Don’t wait another minute if you’re in upstream, midstream or a financial institution, you need this data to compliment your research.

That just brings us through the next month!  Lots more ahead of that.

Stay positive folks we can only go up from here!

-mj

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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