The cleaver, the scalpel, and then, finally, some glue…

A look at operating model adjustments, M&A, and collaboration within the oilfield equipment manufacturing sector through the industry decline of the past year and a half.
The butcher’s bill for the whole of the oilfield services sector has been extensive in the wake of WTI’s mid $20s bottoming and the resulting CAPEX austerity. With liquidity preservation understandably serving as priority one for E&P customers during the maelstrom, short-cycle activity ground to a standstill and orders – both via capital equipment deferral/cancellation and inventory cannibalization for consumables – dried up completely. The recent WTI recovery to the mid $40s has only just now begun to shake loose an increase in customer inquiries. While the rig count has shown signs of modest uplift with speculation regarding the return of completions work, most operators are still characterizing the inquiry lift as yellow shoots – that is, the phone is ringing more but it’s not yet meaningfully translating into purchase orders or booked jobs. [Read more…]

From Fracked to Floated: The Next Chapter in the U.S. Natural Gas Story

If a revolution is defined as the overthrow of an old system in favor of a new, then the shale revolution warrants the term. We now ask: Are the first LNG cargoes from the United States just another chapter in the volatile shale revolution, or the first chapter on a new and sustaining U.S.-centered global LNG marketplace?
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Oil & Gas Executives, Talent and $30 Problems

$30 oil requires solid leadership and crazy efforts at managing talent.

The Oil & Gas industry has cycles; it’s a well-known challenge. Less obvious is that not everyone is experienced in this event. The industry is in the middle of a significant demographic shift, and it’s likely that many have not experienced such a significant change in favor over such a short period of time.
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Oil 2016: Trends the Market May be Missing

2016 Summary Outlook
Current consensus forecasts indicate the global oversupply of crude oil will persist in 2016 with the U.S. Energy Information Agency (EIA) calling for December 2016 oversupply of 600,000 barrels per day. This forecast is confirmed by 2016 WTI futures, which have an average 2016 strip price of $40 and a December 2016 price of $43. However, we believe this current strip may not be accurately pricing in dynamics of both supply and demand that we see materializing in the second half of 2016. We are forecasting that global supply and demand will be roughly in balance by the end of 2016, resulting in oil prices trading in the $50 to $60 range. Furthermore, we note that relative total production cost advantages of shale wells will benefit specific sectors within the U.S. energy industry in 2017 and beyond.
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