oilfield services

Punxsutawney Phil presaged six more weeks of winter when he saw his shadow on February 2, the famous groundhog’s annual attempt to predict the arrival of spring that garners national headlines, despite his dismal 39% success rate over the last 150 years. Although we haven’t turned to rotund rodents, we spend a lot of time exploring ways to predict energy industry trends. A far more reliable way to gain early insights into E&P spending and production patterns is by analyzing the year-end results and forecasts issued by the major oilfield services firms, which release their year-end reports well before E&Ps typically do. In today’s RBN blog, we review the data and insights from the reports and conference calls of the major firms that are in constant communication with the major oil and gas producers.

There’s a lot of confusion out there — both in the media and the general public — about how producers in the U.S. oil and gas industry plan their operations for the months ahead and the degree to which they could ratchet up their production to help alleviate the current global supply shortfall and help bring down high prices. It’s not as simple or immediate as some might imagine. There are many reasons why E&Ps are either reluctant or unable to quickly increase their crude oil and natural gas production. Capital budgets are up in 2022 by an average of 23% over 2021. That increase seems substantial, but about two-thirds (15%) results from oilfield service inflation. And there are other headwinds as well. In today’s RBN blog, we drill down into the numbers with a look at producers’ capex and production guidance for 2022, the sharp decline in drilled-but-uncompleted wells, the impact of inflation and other factors that weigh on E&Ps today.

Getting by without a few million barrels a day of Russian crude oil won't be easy for the global market, but it's gotta be done. One way to help ease the supply shortfall would be for U.S. E&Ps to ramp up their crude oil production, but the oil patch's output has remained close to flat — so far at least. Why aren't producers jumping in? Are the Biden administration’s policies and mixed messages on hydrocarbons putting the kibosh on production growth? Is it a scarcity of completion crews, or pipes or frac sand? Perhaps it’s worries that increasing production would send oil prices sliding and hurt producers’ bottom lines? Or is it all about ESG and the shift by many large investment funds and banks away from anything related to fossil fuels? Possibly all of the above? In today’s RBN blog, we look at what’s really behind the snail’s pace of U.S. crude oil production growth.