The Drilldown: in-depth answers to oilfield questions | w/ Richard & John Spears

We're back from a deep hibernation and boy have things changed! This episode we talk how to value oilfield service companies in the current market environment, how commodity pricing doesn't drive the industry as much as it used to, and how investor mindset has changed. Produced by Charlie Spears

Richard and John review the challenge to US oilfield service firms in accommodating a significant increase in oilco activity in 2022. Topics addressed include market segmentation by operator size, contract duration requirements, risks from new technologies, and the potential for market consolidation.

Richard and John preview the upcoming discussions between oil company managements planning to significantly increase capital spending in 2022 and possible pushback from investors. Topics addressed include long-term versus short-term demand expectations, “resilient” reserves and “bifurcated” investment groups.

Richard and John review the findings the EIA's newly-released outlook for the global energy market to 2050 and discuss its implications for the oilfield equipment and service industry.

Richard and John identify next year's market segment winners and losers and discuss the factors driving differences in the rate of revenue growth in 2022.

Richard and John identify 2021's market segment winners and losers and discuss the factors driving the differences in revenue growth this year.

Richard & John go over common biases when forecasting....anything.....but especially the oilpatch.

Richard and John discuss the 2022 outlook for US frac activity, including rig activity, DUC drawdown rate and frac pricing.

Richard and John discuss how they expect US operators will decide to allocate next year's free cash flow.

We're back after a summer hiatus. This week we recap what's gone on this summer, quarterly financials, and how operator price assumptions affect their decision making in 2022.

Rising oil prices & less anticipated demand -- how do we interpret conflicting projections for oil demand?

In the third of a two-part series Richard and John discuss how challenges in implementing net-zero emission (NZE) plans could revise the (bearish) long-term outlook for oil and gas demand. What are some of the key issues that could impact how quickly NZE goals will be realized?

In the second of a two-part series Richard and John discuss how current drilling and completion operations are being impacted by long-term climate change expectations and what the implications could be for US oil and gas production.

How climate change & net zero are causing wet frac sand to show up on location.

Richard and John discuss the factors driving the Q1 increase in US drilling and completion costs, the capital spending outlook for US operators, oil demand elasticity and the outlook for oil prices.

A big picture look at what comes next.

Richard and John discuss four oilpatch events/trends they expect to emerge in Q2 2021: shortages, restructuring, bifurcation, and SPACs.

The ongoing recovery in US drilling activity has caused some spot shortages for materials to emerge. At the same time, the number of new job openings for oil service workers has more than doubled since Q4 of last year. Richard and John discuss what this might mean for the cost to drill and complete wells, efficiency, and where the next shortages are likely to appear.

Richard and John discuss whether net-zero initiatives will be sufficient to keep ESG-sensitive funds invested in oil companies. Plus a Gilbert and Sullivan reference!

Richard and John review information regarding recent trends in oil service activity and pricing found in the Spears industry dataset.

Lost in last week's headlines about sub-zero temperatures, rolling blackouts and soaring energy costs was news about what has become the most important price for the US petroleum industry. Richard and John discuss SCC and its impact on the oil and gas sector.

Richard and John review the financial performance, capital structure and capex activity of oil service firms accounting for over half the global oilfield equipment and service market. Will their improved financial performance trigger an increase in M&A activity in 2021?

Are there millions of unplugged abandoned wells in the US as some have claimed and whether it would be worthwhile to plug them to cut down on GHG emissions and provide jobs. We also talk enteric fermentation, or methane emissions per cow-year.

Richard and John use voice of the customer responses to reveal challenges in determining trends in frac efficiency.  the McNamara Fallacy  will prioritizing efficiency over effectiveness continue?

Richard and John review the financial performance and capital structure of publicly-traded oil companies accounting for one-third of the US market and discuss the potential for a sharp recovery in their capital spending in 2021.

Richard and John discuss the lessons learned from comparing their estimates of market segment growth with Halliburton's actual Q4 2020 financial results. This episode also features the introduction of the Puzzler Challenge!

Richard and John discuss 10 questions being asked by investors, operators and service firms in a joint presentation made to the Mid-Continent Section of the Society of Petroleum Engineers (SPE) on 1/12/2021. Charlie Spears

In their first podcast of the new year, Richard and John highlight some of their expectations for the US oilpatch in 2021 and raise two issues for further consideration.

In their last podcast of the year, Richard and John step away from the oilpatch and highlight some of the more unusual events and best pivots of 2020.  

This week we're broadcasting from our video chat with the Gulf Coast SPE luncheon. We kick off by discussing whether US operators can hold output steady, de-leverage AND grow shareholder returns at the same time. Recorded live from Richard & John's presentation to the SPE/API (Gulf Coast) luncheon on 12/8.

Richard and John respond to a couple of questions about drilling activity in the US and the Middle East.

Just in time for Thanksgiving, Richard and John identify where “high calorie” wells are drilled and what the outlook is for those markets.

Richard and John discuss what recent declines in drilling activity outside North America appear to say about NOC intentions regarding future oil production capacity.

Richard and John present three scenarios for frac activity and US oil production for the coming year and discuss the implication for oil prices. Other topics addressed include: How a sharp DUC drawdown just delays a collapse in US oil output to 2022

Richard and John discuss what HAL's Q3 results mean for US frac activity. Also - What Bobcat Goldthwait, the wives of Henry VIII, and invading Russia have in common

What recent oil company mergers say about the outlook for E&P activity, supply chain consolidation and market share growth.   Produced by Charlie Spears

Richard and John discuss elements impacting free cash flow for US operators and how this will determine E&P capex and rig activity going forward. Specific topics addressed include: “Haircut” given to spot oil prices when setting capex budgets Royalties, production taxes and operating costs % going for debt reduction and shareholder returns

Richard and John discuss topics which caught their attention this week, including: Caterpillar's acquisition of Weir; Saudi breakeven pricing; Q3 OFS earnings expectations; and progress on nuclear fusion.

Anecdotal evidence from Richard's current road trip suggests US economic activity is largely returning to normal and explains why the EIA has revised its estimates of Q4 US oil use significantly higher in recent months. Richard and John discuss how this would impact inventory drawdowns and oil prices.

Schlumberger has begun to reduce its exposure to the North American oilpatch. Richard and John discuss how this process will likely result in consolidation of  important segments of the NAM market. We also chat about -- Does the possibility of a Biden administration impact the timing and/or success of this process? Will competitors or customers object to market consolidation?

Major oil companies are increasing their investment in renewable resources as they transform into btu- agnostic energy suppliers. Richard and John describe the US renewables market and discuss the outlook for this sector.

The recently-announced combination of Liberty and Schlumberger is shaking up the NAM frac market. Richard and John discuss the outlook for activity and pricing over the coming year.

Richard and John discuss the process used to create and update the market size and share estimates found in the Oilfield Market Report.

Natural gas demand is up, pricing recovers a bit. Is this sustainable going forward? We talk about what it looks like as the LNG market tightens up.   Produced by Charlie Spears

Our podcast today goes out to Warren Buffet & similar investors. We see a 3-phase recovery by market sector. Where & when should investors deploy their capital?   Produced by Charlie Spears

With reserves plentiful but facing limits on CO2 emissions, oil companies are re-focusing their R&D programs. What implications does this have for the oil service sector? Other topics discussed include:  The link between oil service revenues and R&D budgets  R&D's “Blutarsky moment”  The optimal length of a lecture

Looks like we were a bit too optimistic for Q2! This episode we contrast and compare the Q2 financial results of major oil service companies for clues about what is happening in NAM and International markets and the implications for technology development.   Produced by Charlie Spears

Is Q4 the new "spring dip"? Is drilling seasonality now driven by budget exhaustion?

Richard & John talk about what happens to oilfield service prices over the next few quarters.

Richard and John discuss the similarities and differences between the theatre business and the oil and gas industry and the challenges each faces in recovering from the pandemic. We also discuss movies with an exclamation point in the title!

How much oilfield product/service line revenues were impacted Q2 as operators' slashed capex and what this means for supply chain resiliency.