Frackers finding work in Permian Basin

Fuel Fix:

Many high-horsepower pumps are sitting idle at the nation’s largest oil patches, even after they reignited U.S. energy production and stirred national debate over a process called hydraulic fracturing.

But others are being hauled across the country to find work in the plains of West Texas, about the only place where fracturing companies have been able to escape a crippling glut in equipment.

Rigs designed for horizontal drilling made a big move last year into the Permian Basin, the last major U.S. oil patch to remain a stronghold for older vertical units.

That means a lot more business for the $31 billion fracturing industry, which shoots pressurized payloads of water, sand and chemicals deep into the earth to break open dense shale rock. Horizontal operations access more of a reservoir and require more pressure pumping.

But that’s small relief two years after a surge of oil field services startups left the U.S. market with far too much fracturing equipment and sent prices for fracturing jobs plummeting.

“I’m not going to kid you and say it’s not a challenge to survive,” said Greg Lanham, chief executive of FTS International, the fourth-largest U.S. hydraulic fracturing company by horsepower, a measure often used for fracturing companies’ capacity. “But we’ve been able to adapt quickly enough, and we’ve been able to maintain our market share.”

The West Texas oil patch, where FTS International hired another 50 employees to its roster of 275 workers last year, has quickly become the most competitive oil basin in the U.S. — though it’s still the most lucrative, Lanham said.

He said moving some of the company’s mobile fleet to Odessa, in the heart of the Permian, has improved revenue, and the company is planning to hire more crew members and move more equipment from less active regions to West Texas.

On Jan. 17, the number of active horizontal rigs in the Permian Basin was 249 — up more than 100 from a year before, according to Baker Hughes. That’s more than five times the number added in the second-most active region, the DJ Basin centered in Colorado.

“It’s the one basin we’re seeing tremendous growth — the other basins have flat-lined,” said Bill Herbert, an analyst at Houston-based Simmons & Company International. “I think the Permian is going to continue to move up.”
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The Cline and the Wolfcamp formation have been active in the Permian Basin area and I think the Cline has more potential than the Eagle Ford in south Texas which has been one of the most active areas.   The jobs market in the Midland-Odessa area has been one of the most competitive in the country and it appears the frackers are still hiring and they have an excess of equipment.  The moves show the dynamics of the oil extraction business.