March 6, 2018
Halliburton, already the industry’s largest pressure pumper in terms of deployed horsepower, has consolidated its leading position through a massive expansion of its capacity over the past year. According to Rystad Energy’s latest assessment, Halliburton has surpassed 4 million horsepower by adding roughly 700,000 horsepower since the first quarter of 2017.
Halliburton’s recent additions make their fleet 1.6 million horsepower larger than their closest rival Schlumberger. The ramp-up beyond the 4 million horsepower threshold will likely come as a surprise to most of the market, as many analysts are currently reporting a fleet of around 3 million horsepower.
“Halliburton is one of the few service companies that makes their own pumps so it is tougher to keep track of their active horsepower,” says Ryan Carbrey, Senior Vice President of Shale Research at Rystad Energy in Houston. “We have been able to determine their active horsepower through our primary intelligence channels, including North American on-the-ground networks in each basin, and data analysis. Halliburton’s increase shows their continued commitment to maintain and grow market share,” Carbrey says.
Rystad Energy estimates the market as a whole to have added 3.3 million horsepower during the course of 2017 and expects another 3.3 million in 2018. This comprises 1.3 million more in newbuilds and 2 million via refurbishments of non-working equipment, providing much needed relief to the tightening pressure pumping market.
Among other major service providers, Schlumberger plans to add 1 million horsepower via refurbishment of the Weatherford fleet between 2017 and 2018. BJ Services is projected to finish refurbishing 2.2 million horsepower by the third quarter of 2018, although this fleet is unlikely to run at full efficiency due to the urgent need to train new crews. Pro Frac has purchased more than 500,000 horsepower worth of engines and transmissions that it expects to convert into frac capacity by the end of 2018.
“Equipment manufacturers are at full capacity right now, and some pumpers have had to delay deployment of planned additions,” says Alex Yang, Senior Analyst of Shale Research at Rystad Energy. “Much of the newly built equipment is earmarked for refurbishment programs rather than totally new spreads.”
Rystad Energy expects pressure pumping spot prices to increase 10-25% through the second quarter of 2018, as utilization rates approach the vital 80-85% threshold.
Link to website product page: https://www.rystadenergy.com/products/nas-solutions/shaleintel/