Updated Basin Activity Reports (Q2 2019 - Q2 2021)

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These reports analyze USL48 basin oil & gas assets, operating companies, production, capex, rigs deployed, and the number of new wells brought online, looking back at the past four quarters and looking forward to the next four quarters.

What are these reports?

These reports analyze USL48 basin oil & gas assets, operating companies, production, capex, rigs deployed, and the number of new wells brought online, looking back at the past four quarters and looking forward to the next four quarters.

  • We sourced all research, charts, data, and analyses from Heikkinen Energy Advisors (HEA) Research and Advisor Energy applications.
  • This release covers the period from Q2 of 2019 to Q2 of 2021, as reported during the Q1 2020 Earnings season and as modeled forward by the HEA analysts.
  • You can download the data behind each chart by clicking on the button below each chart.
  • These are online reports, available on discover.energy.
  • If printed, the reports would range from 53 pages (DJ Basin) to 250 pages (Permian Basin).
  • The reports include data files with company and asset metrics in .xls format and plot files in .pdf format.
  • Only public E&P companies covered by Heikkinen Energy Advisors (HEA) are within the scope of this analysis.

What's the latest?

With the first month of 2Q20 under our belt, it is apparent that our previous NAM activity forecasts did not fully account for the pace of NAM activity declines. We have been modeling a horizontal rig count decline of nearly 70% from peak 1Q20 levels, and while that still seems to be a reasonable bogey, it looks like we will be most of the way there by June vs. our original Q3 timeline, which drives our 2020E US horizontal rig count forecast 14% lower. Our 2020E completions forecast takes an even bigger hit, falling 21% with many operators halting virtually all completion activity for at least Q2 and potentially well into 2H20.

Figure 1 - New vs. Prior US Activity Assumptions

Source: Baker Hughes, Rystad, and HEA estimates

Rig count revisions are driven mostly by timing. We are now modeling a full-year decline of 487 horizontal rigs from the YE 2019 exit rate of 702 (~70% total decline), which is only 7% more than our prior estimate of a decline of 454 rigs. The far bigger driver of our Y/Y change in forecast is the timing of the declines, which have been decidedly more front-loaded than we anticipated. We are now modeling a total decline of 399 horizontal rigs in Q2 vs. our previous assumptions of a decline of 395 rigs by the end of Q3. Additionally, 70% of the Q2 decline we are modeling (279 rigs) occurred in April, leaving the Q2 declines very front-loaded vs. the more typical linear decline throughout the quarter. The pace of the declines should soon begin to moderate if for no other reason than many basins outside the Permian don't have many rigs left to drop. Additionally, commentary from both land drillers and E&P operators indicate rig counts will begin to trough by June, although we model some modest declines in 2H20 as well.

Figure 2 - Estimated Change in US Horizontal Rigs by Quarter

Source: Baker Hughes, HEA estimates

Completion activity almost at a standstill. There are numerous indications from completions-levered service providers that Q2 completion activity could be down 75-85%+ Q/Q in 2Q20 as the widely discussed "frac holidays" morph into extended vacations in the face of extremely low regional wellhead prices and production shut-ins. We are modeling Q2 total completions down 79%, which is supported in part by lower declines in gas basins as the Q/Q declines in oily basins all exceed 80%. While there is some potential for an increase in completion activity in Q3 as crude storage normalizes, we find ourselves inclined to err on the side of caution as run-rate E&P budget guidance for the remainder of 2020 is declining rapidly through Q2 earnings season, suggesting limited near-term increases in activity.

  • Frac demand is abysmal. The near halting of frac activity in oily basins that began in April has had a devastating impact on frac demand. We now see total horsepower demand falling to about 59 fleets in Q2, implying demand for about 2.6MM HHP, or less than 15% utilization of total industry capacity. Even with some improvement in 2H completion activity, we see total frac demand remaining below 70 fleets for the balance of 2020.

Figure 3 - Key US Land Activity Assumptions

Source: Baker Hughes, Rystad, and HEA estimates

What is included in these reports?

Table Of Content

  • Introduction
  • Revising NAM activity assumptions for an unprecedented pace of decline
  • Current Price Decks
  • Board Pack - Covered Operators
  • Basin Asset Summary
  • Basin Asset Comparison
  • Capex and Net Production Analysis
  • Production, Rigs and New Wells
  • Company Analysis

Data Tables And Charts In These Reports

  • Current Price Decks
  • Basin E&P Operators Board Pack (Metrics)
  • Total Production (Mboe)
  • Total Revenue ($MM)
  • LOE ($/boe)
  • Production Taxes ($MM)
  • DD&A ($MM)
  • Total G&A ($MM)
  • Total Other ($MM)
  • Net Income Margin ($/boe)
  • DCF Margin ($/boe)
  • Realized Prices before Hedges | Equivalent ($/boe)
  • Realized Prices after Hedges | Equivalent ($/boe)
  • Cash G&A ($/boe)
  • Opex ($/boe)
  • Operating + Financing ($/boe)
  • Basin Asset Summary
  • Basin Asset Comparison (Inventory, Type Curves, Economic Inputs, Single-Well Economics, and More)
  • 2019 Q2 - 2020 Q1 Basin Capex and Net Production by Operator
  • 2020 Q2 - 2021 Q2 Basin Forecasted Capex by Operator
  • 2019 Q2 - 2020 Q1 Basin Capex Allocation by Asset
  • 2020 Q2 - 2021 Q2 Basin Forecasted Capex Allocation by Asset
  • 2019 Q2 - 2020 Q1 Basin Capex Efficiency
  • 2019 Q2 - 2020 Q1 Basin Capex Proportion per Company
  • Basin Oil Production by Asset
  • Basin Gas Production by Asset
  • Basin Active Rigs by Asset
  • 2019 Q2 - 2020 Q1 Actual / 2020 Q2 - 2021 Q2 Forecast Basin New Wells Brought Online by Operator
  • Basin New Wells Brought Online Quarterly by Asset
  • Basin Asset Wells Lateral Length by Asset
  • Basin Feet Between Asset Wells by Asset
  • Data by Company
  • Oil Type Curve per Asset
  • Oil Production per Asset
  • Gas Type Curve per Asset
  • Gas Production per Asset
  • Active Rigs per Asset
  • Wells Brought Online per Asset
  • Capex per Asset
  • Lateral Length and Feet Between Wells

How do I access these reports?

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How do I access these reports for the previous quarter?

Click on the date in the upper right corner of the report to access previous versions of this report.

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