Drillers race to beat higher fracking costs
Explorers are racing to get frack jobs done in the Permian Basin and other U.S. shale-oil fields before higher prices kick in next year, according to research and analysis firm Lium LLC.
The number of hydraulicfracturing crews deployed across the U.S. shale patch jumped by 10 in recent weeks to 230, Lium analysts said in a note titled “Permianflation” on Friday. A crew typically consists of 25 to 30 workers who operate a huge array of truck-mounted pumps, storage tanks for fluids and sand, hoses, gauges and safety gear.
“Operators are accelerating completions activity in anticipation of 10-15 percent higher well costs next year,” according to Lium. “Rising well costs could slow down U.S. oil and gas production growth by putting pressure on maintenance capital scenarios.”
A number of shale explorers including Devon Energy Corp., Diamondback Energy Inc. and ConocoPhillips warned investors this week that inflation could rise 10 percent to 15 percent next year as supply-chain snarls make equipment and labor more pricey.
Explorers have said they’ve so far been able to manage rising costs through efficiency gains in the field.
Drilling crews, which come in ahead of the frack workers to bore a hole several miles into rock, are also on the rise.
The number of rigs drilling for crude in U.S. fields rose by six to 450 this week, according to Baker Hughes Co. data released Friday.
One of America’s biggest drillers, Occidental Petroleum Corp., said it plans to add a pair of rigs every three months in the Permian Basin of West Texas and New Mexico.