Rig Counts vs Frac Spreads vs Frac Jobs
WHEN you are trying to decipher what is going on in the oil field, getting your terminology right is important. Analysts looking at unconventional oil and gas production have a few metrics that are updated frequently, lets go over them one by one.
Perhaps the best-known number in the oil business is the Baker Hughes rig count. Baker Hughes is an oil field service company that has been issuing counts of active drill rigs since 1944. To be “active,” a rig must be on location and turning to the right. In other words, a rig is active from the initial cut into the ground until it reaches its target depth. A rig is not active if it is just moving between locations, being set up, or being used for a non-drilling activity. Non-drilling activities can including testing, workovers (which can include running a drill through an existing well), and completions (preparing an already-drilled well for production).
The Baker Hughes rig count is a prized data point because it provides a rough proxy for the amount of drilling being done at a particular time. Analysts from all corners of the industry use the data to predict things like future production and drilling equipment needs.
A frac spread is the collection of equipment needed to hydraulically fracture a well. This typically includes a combination of pumps, data trucks, storage tanks, chemical additive units, and blenders. Frac spreads (sometimes they’re referred to as frac fleets) conduct frac jobs. A frac job typically takes a handful of days, and involved pumping fluids down a drilled well at a high pressure to fracture the rock below to allow oil and gas to flow into the well. Frac’ing fluids typically include sand, which acts as a “proppant” to keep the fractures open. After years of explosive growth, frac jobs have slowed down over the last two years.
In a sense, a count of active frac spreads and frac jobs is very similar to an active rig count. The numbers do not always align, however. There has been much talk since the recent downturn about the “fraclog,” for example. This is a backlog of wells that have already been drilled but have not yet gone through the costly frac’ing process. A company that sells proppant sand, for example, should be far more interested in the number for frac jobs than the number of active drilling rigs. As you can see, counts of active rigs and active frac spreads don’t always follow each other. [Matt Johnson — Oilpro]