Oil Service Companies: Getting Their 'Frack' On
Fracking sounds like a four letter word, but I am here to tell you, it is nothing of the sort. Fracking is the method by which shale natural gas and oil are extracted. So for you oil and gas investors out there, its not a four letter word at all. Who is doing the fracking, and how can you get in on it?Keith Schaefer gives us the whole story.
" …The fracking industry. After you drill an economic well you have to “complete” it, which means getting the oil out of the ground. In shale plays, or any tight sand oil or gas play, fracking and completing have basically become the same thing.
Drilling used to be the highest cost component of a well; now it is completions and testing. Today that comes to roughly 54% of the total well cost, versus just 17% in 2000. (In Canada, the largest fracking companies generate as much cash flow as the biggest drilling companies.)
The fracking industry is judged not by the number of fracking rigs or setups, but the amount of horsepower (HP) any one company can provide. Macquarie Capital estimates that in the U.S., HP demand will jump 62% in three years, from 9.1 million HP now to 14.8 million HP in 2014 – and it expects the market to still be under-supplied then. In Canada, oil and gas companies can wait up to four months for a fracking crew…"
Read the entire article here: http://seekingalpha.com/article/272517-4-fracking-industry-players-looking-to-shine