The pressure pumping in North America has seen significant growth over the past year and is projected to continue expanding in 2022 as oil and gas drilling activity ramps up across the region. Let's take a closer look at some of the key trends driving demand.
Rise in Shale Well Drilling Drives Need for Pressure Pumping Services
Hydraulic fracturing, also known as fracking, has unlocked vast reserves of shale oil and gas across the United States and copyright in recent years. The complexity of shale well completions requires pressure pumping horsepower to efficiently extract these resources from the ground. In 2022, shale drilling is forecast to increase by over 15% in both the US and copyright according to analysts. This rise in well development and stimulation activities has corresponded with higher demand for fracturing, cementing, and coiled tubing services provided by pressure pumping companies. Major shale basins like the Permian, Bakken and Marcellus areas will be key growth s.
Fleet Expansion Underway to Meet Needs of Busier Drillers
With the outlook increasingly positive, pressure pumping providers have been expanding their fleets to add capacity. Many large service firms spent 2021 upgrading their high-spec fleets with new-build pumps, lines and other equipment. Additional spreads are also being deployed as rig counts rebound. It's estimated that over 150,000 hydraulic horsepower was added to North American pressure pumping fleets last year. Further expansion is anticipated as demand continues growing in 2022. This growing supply side response aims to avoid constrained capacity issues seen previously during drilling booms.
technology is also seeing rising integration as pressure pumpers look to improve efficiencies. Real-time fracturing optimization, remote pumping coordinate and automated well monitoring help customers maximize production.
Pricing Power Returns as Utilization Rates Rise
After struggling with oversupply issues in recent years, North American pressure pumping Report are finally seeing meaningful pricing power return. Utilization of active fleets surpassed 80% in late 2021 according to secondary source data - the highest in several years. With demand growth outpacing capacity additions, pricing is firming across most basins and service lines. Dayrates for advanced fleets have risen 15-30% from lows in some regions. Spot pricing is also trending higher sources indicate. The normalization of pricing is a welcome development for pressure pumping providers seeking to improve margins after recent downturns.
Outlook Remains Upbeat Barring Any Unforeseen Developments
Barring any unforeseen events that could curb activity like major delays in energy infrastructure projects or renewed macro uncertainty, the multi-year outlook for pressure pumping in North America is positive. EIA projections forecast steady production growth in both Canadian and US oil and gas through 2025 minimum as investment returns to major shale plays. Further consolidation may also transpire sources predict as larger firms seek added scale. Private equity interest in pressure pumping assets also looks set to continue amid attractive fundamentals. All signs point to North America remaining a lucrative globally for pressure pumping services as drilling and completions activity remains on the rise.
International Players Eye Opportunities as Matures
As the North American matures, international pressure pumping companies are showing increased interest in gaining a foothold. Firms from Argentina, Russia and the Middle East have all boosted their presence on this side of the Atlantic in recent years via M&A and organic fleet additions. They see the continent as an attractive offering stability relative to volatility at home. Integration could also provide access to technical expertise and relationships with major E&P customers operating internationally. However, cultural, geographical and regulatory hurdles remain for foreign players seeking to truly establish themselves versus just testing the waters. For now the is still led solidly by entrenched domestic producers, but international participation looks sure to grow.
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