Shale Gas & Tight Oil: Products & Services

 Published On: Feb, 2014 |    No of Pages: 397 |  Published By: Freedonia | Format: PDF   |   Free Sample Report

US demand to surpass $90 billion in 2017
Demand for products and services used in the development of shale gas and tight oil reservoirs is forecast to surpass $90 billion in 2017. The rapid growth in production from these unconventional resources continues to have a ripple effect throughout the US economy. After years of declines, US crude oil production is rising again and abundant low cost natural gas resources are rejuvenating the US manufacturing sector. This will provide opportunities for oilfield service companies across the board and will continue to require large amounts of chemicals, proppants, and essential equipment such as drill bits, tubular goods, and well logging equipment.

Liquid plays to remain strong; gas plays to revive
Large scale shale gas development began in the Barnett in the early 2000s and quickly spread to other natural gas plays. However, in recent years, low gas prices have limited growth in the gas sector (except for newly developing plays such as the Marcellus) and narrow profit margins for shale gas operators and a jump in oil prices have turned attention to more liquid rich plays such as the Bakken, Eagle Ford, and Permian Basin formations. Going forward, activity in liquid plays will remain strong and a forecast recovery in natural gas prices will begin to drive renewed interest in dry gas plays such as Haynesville. Demand for products will be driven not only by overall levels of industry activity but also by increasing well depths and continued efforts to maximize well output and heighten drilling and completion efficiency. The continued usage of high volume hydraulic fracturing will require significant amounts of fracturing fluids and proppants as well as pressure pumping services. As plays enter the development stage, operators will work to optimize their process designs, which will lead to continuing changes in the types of proppants and fluids used. For example, in recent years gelled fluids lost ground to slickwater formulations but now operators are moving away from slickwater in some areas to hybrid fluids or other products that improve well output while minimizing environmental impact. Furthermore, many operators have begun using proprietary water based drilling muds that mimic the performance of oil and synthetic based muds, but at less risk to the environment.

A significant amount of this new unconventional resource development is occurring in areas that were not traditional hotbeds of oil and gas activity. In some cases this resulted in a backlog of wells that needed completion due to a lack of available infrastructure or shortages in completion crews. However, it has also increased regional demand for a number of products used in well drilling and completion and prompted the opening of new regional manufacturing facilities to make these products.

Well output to fall, boosting product & service demand
As some of these shale gas and tight oil plays begin to reach maturity over the next decade, average per well output will fall as the number of new wells is unable to offset the production declines in legacy wells. This should spur healthy demand for production and workover services but also will prompt continued drilling of new wells to support output. Additional opportunities will present themselves should production from plays with considerable potential like the Monterey and Wolfcamp become commercially viable over the next 10 years.

Study coverage
This Freedonia industry study, Shale Gas & Tight Oil: Products & Services, presents historical demand data for 2007 and 2012, plus forecasts for 2017 and 2022 by product, service, region and play. The study also considers market environment factors, evaluates company market share and profiles 41 competitors in the US industry.

INTRODUCTION xii

I. EXECUTIVE SUMMARY 1

II. MARKET ENVIRONMENT 4
Macroeconomic Environment 4
Demographic Overview 7
US Petroleum & Natural Gas Overview 11
Petroleum Market 14
Exploration & Reserves 17
Production 20
Drilling 21
Pricing 24
Natural Gas Market 25
Exploration & Reserves 27
Production 29
Drilling 32
Pricing 34
Environmental & Regulatory Considerations 35
International Activity 38

III. OVERVIEW 41
General 41
Technology Overview 43
Exploration 44
Drilling 45
Completion 47
Hydraulic Fracturing 48
Multistage Fracturing 51
Refracturing 52
Other Fracturing Techniques 52
Cost Comparison 53
Drilling & Completion Activity 54
Tight Oil 56
Shale Gas 58
Production Outlook 60
Tight Oil 61
Shale Gas 63
Shale Products & Services Demand 64

IV. PRODUCTS 68
General 68
Drilling Products 69
Equipment & Parts 71
Tubular Goods 74
Downhole Tools 78
Drill Bits & Reamers 82
Other Equipment & Parts 84
Market Share 86
Drilling Fluids 88
Oil-Based 92
Water-Based 93
Synthetic-Based 94
Market Share 95
Stimulation Products 97
Proppants 99
Sand Proppants 103
Raw 105
Coated 108
Ceramic 111
Other Proppants 113
Market Share 115
Chemicals & Gases 117
Gelling Agents 122
Biocides 126
Gases 128
Acids 131
Breakers 132
Crosslinking Agents 134
Other Chemicals 136
Market Share 139
Other Fluids & Materials 141
Cementing Products 143
Completion & Workover Fluids 145
Production Chemicals 147

V. SERVICES 149
General 149
Pressure Pumping Services 151
Drilling Services 154
Other Completion & Production Services 159
Market Share 161

VI. REGIONS & PLAYS 165
General 165
Shale Activity by Region 166
Tight Oil 168
Shale Gas 169
Shale Activity by Play 172
Production 172
Tight Oil 172
Shale Gas 175
Rigs & Wells 177
Tight Oil 178
Shale Gas 181
Shale Products & Services Demand by Region 186
Southern Region 188
Midwestern Region 191
Eastern Region 193
Western Region 195
Shale Products & Services by Play 197
Permian Basin 200
Bakken 204
Eagle Ford 208
Marcellus 213
Barnett 216
Haynesville 220
Woodford 224
Fayetteville 228
Other Plays 231
Monterey 233
Niobrara 235
Utica 236
All Other 238

VII. INDUSTRY STRUCTURE 240
General 240
Market Share 244
Mergers & Acquisitions 247
Cooperative Agreements 250
Research & Development 253
Marketing & Distribution 256
Company Profiles 260
Air Products and Chemicals Incorporated 261
Aker Solutions ASA 263
Aker Well Service AS 264
Akzo Nobel NV 265
Albemarle Corporation 267
Ashland Incorporated 269
Atlas Resin Proppants, see Badger Mining
Axxis Drilling, see Trinidad Drilling
Badger Mining Corporation 271
Baker Hughes Incorporated 273
BASF SE 278
BICO Drilling Tools, see Schoeller-Bleckmann Oilfield Equipment
Cameron International Corporation 280
Canrig Drilling Technology, see Nabors Industries
CARBO Ceramics Incorporated 284
Champion Technologies, see Ecolab
Chemlogics Group, see Solvay
Chesapeake Energy Corporation 287
Chevron Phillips Chemical Company LLC 288
Clariant International Limited 291
Complete Production Services, see Superior Energy Services
Corsitech, see Ecolab
Dow Chemical Company 293
Drilling Specialties, see Chevron Phillips Chemical
DuPont (EI) de Nemours 296
Ecolab Incorporated 298
Ensign Energy Services Incorporated 301
EPCO Carbon Dioxide Products, see Air Products and Chemicals
Excalibar Minerals, see Newpark Resources
Exxon Mobil Corporation 303
Fairmount Minerals Limited 305
Fiberspar, see National Oilwell Varco
FTS International Services LLC 308
Halliburton Company 310
Helmerich & Payne Incorporated 316
Key Energy Services Incorporated 318
M-I SWACO, see Schlumberger
Momentive Performance Materials Holdings LLC 320
Multi-Chem Group, see Halliburton
Nabors Industries Limited 323
Nalco Holding, see Ecolab
National Oilwell Varco Incorporated 327
Newco Valves, see Cameron International
Newpark Resources Incorporated 331
Nomac Drilling, see Chesapeake Energy
Novecare, see Solvay
OAO TMK 334
OFS International, see OAO TMK
Oilfield Technology Group, see Momentive Performance
Materials Holdings
Opsco Energy Industries USA, see Ensign Energy Services
Patterson-UTI Energy Incorporated 337
Performance Technologies, see Chesapeake Energy
Phoenix Well Services, see FTS International Services
Pioneer Energy Services Corporation 339
Praxair Incorporated 341
Precision Drilling Corporation 343
Preferred Sands LLC 344
Pumpco Energy Services, see Superior Energy Services
Saint-Gobain 346
Santrol, see Fairmount Minerals
Schlumberger Limited 348
Schoeller-Bleckmann Oilfield Equipment AG 356
SCR-Sibelco NV 359
Smith Bits, see Schlumberger
Solvay SA 361
Sperry Drilling Services, see Halliburton
Stabil Drill Specialties, see Superior Energy Services
Sub Surface Tools, see Superior Energy Services
Sumitomo, see Vallourec
Superior Energy Services Incorporated 364
Superior Wells Services, see Nabors Industries
Tenaris SA 368
TerraVici Drilling Solutions, see Helmerich & Payne
TETRA Technologies Incorporated 371
TMK IPSCO, see OAO TMK
Trinidad Drilling Limited 373
Unimin, see SCR-Sibelco
United Spiral Pipe, see United States Steel
United States Steel Corporation 375
Universal Pressure Pumping, see Patterson-UTI Energy
Universal Well Services, see Patterson-UTI Energy
US Silica Holdings Incorporated 377
Vallourec SA 379
VAM Drilling France, see Vallourec
Weatherford International Limited 382
Winn Bay Sand, see Preferred Sands
Workstrings International, see Superior Energy Services
XTO Energy, see Exxon Mobil
Additional Companies Mentioned in Study 386

LIST OF TABLES

SECTION I -- EXECUTIVE SUMMARY
Summary Table 3

SECTION II -- MARKET ENVIRONMENT
1 Macroeconomic Indicators 7
2 Population & Households 11
3 Petroleum & Natural Gas Supply & Demand 14
4 Petroleum Supply & Demand 16
5 Petroleum Production & Producing Wells 21
6 Petroleum Drilling Indicators 23
7 Natural Gas Supply & Demand 27
8 Natural Gas Production & Producing Wells 31
9 Natural Gas Drilling Indicators 33

SECTION III -- OVERVIEW
1 Tight Oil & Shale Gas Drilling Indicators 56
2 Tight Oil Drilling Indicators 58
3 Shale Gas Drilling Indicators 60
4 Tight Oil & Shale Gas Production & Producing Wells 61
5 Tight Oil Production & Producing Wells 63
6 Shale Gas Production & Producing Wells 64
7 Shale Products & Services Demand 66

SECTION IV -- PRODUCTS
1 Shale Products Demand 69
2 Drilling Products Demand by Type & Play 71
3 Equipment & Parts Demand by Type & Play 73
4 Tubular Goods Demand by Type 78
5 Downhole Tool Demand by Type 82
6 Drill Bits & Reamers Demand by Type 84
7 Other Equipment & Parts Demand 86
8 Drilling Fluid Demand by Type & Play 91
9 Stimulation Products Demand by Type & Play 99
10 Proppants Demand by Type & Play 102
11 Sand Proppants Demand 105
12 Raw Sand Proppants Demand 108
13 Coated Sand Proppants Demand 110
14 Ceramic Proppants Demand 113
15 Other Proppants Demand 115
16 Chemicals & Gases Demand by Type & Play 121
17 Gelling Agent Demand by Play 126
18 Biocides Demand by Play 128
19 Gases Demand by Play 130
20 Acids Demand by Play 132
21 Breakers Demand by Play 134
22 Crosslinking Agent Demand by Play 136
23 Other Chemicals Demand by Play 138
24 Other Fluids & Materials Demand by Type & Play 142

SECTION V -- SERVICES
1 Shale Services Demand 150
2 Pressure Pumping Services Demand by Type 154
3 Drilling Services Demand by Type 158
4 Other Completion & Production Services Demand by Type 161

SECTION VI -- REGIONS & PLAYS
1 Tight Oil Activity by Region 169
2 Shale Gas Activity by Region 171
3 Tight Oil Production by Play 174
4 Shale Gas Production by Play 177
5 Active Tight Oil Rigs by Play 179
6 Tight Oil Wells Drilled by Play 180
7 Tight Oil Wells Completed by Play 180
8 Tight Oil Producing Wells by Play 181
9 Active Shale Gas Rigs by Play 183
10 Shale Gas Wells Drilled by Play 184
11 Shale Gas Wells Completed by Play 185
12 Shale Gas Producing Wells by Play 186
13 Shale Products & Services Demand by Region 187
14 Southern Region: Shale Products & Services Demand 190
15 Midwestern Region: Shale Products & Services Demand 193
16 Eastern Region: Shale Products & Services Demand 195
17 Western Region: Shale Products & Services Demand 197
18 Shale Products & Services Demand by Principal Play 199
19 Permian Basin: Shale Products & Services Demand 202
20 Bakken: Shale Products & Services Demand 206
21 Eagle Ford: Shale Products & Services Demand 210
22 Marcellus: Shale Products & Services Demand 214
23 Barnett: Shale Products & Services Demand 218
24 Haynesville: Shale Products & Services Demand 222
25 Woodford: Shale Products & Services Demand 226
26 Fayetteville: Shale Products & Services Demand 229
27 Other Plays: Shale Products & Services Demand 233

SECTION VII -- INDUSTRY STRUCTURE
1 US Shale Products & Services Sales by Company, 2012 242
2 Selected Acquisitions & Divestitures 249
3 Selected Cooperative Agreements 252
4 Research & Development Expenditures: Selected Oilfield
Service Companies, 2008-2012 256

LIST OF CHARTS

SECTION II -- MARKET ENVIRONMENT
1 US Petroleum Imports by Source, 2012 17
2 Petroleum Reserves, 2002-2012 19
3 Crude Oil Reserves by State, 2012 19
4 Petroleum Drilling Indicators, 2007-2012 23
5 Petroleum Prices, 2002-2012 25
6 Natural Gas Reserves, 2002-2012 28
7 Natural Gas Reserves by State, 2012 29
8 Natural Gas Production, 2002-2012 31
9 Natural Gas Drilling Indicators, 2007-2012 33
10 Natural Gas Wellhead Prices, 2002-2012 35

SECTION III -- OVERVIEW
1 Shale Products & Services Demand, 2007-2022 67

SECTION IV -- PRODUCTS
1 Equipment & Parts Demand by Type, 2012 74
2 Drilling Equipment & Parts Market Share, 2012 88
3 Drilling Fluid Demand by Type, 2012 92
4 Drilling Fluids Market Share, 2012 96
5 Proppant Demand by Type, 2012 103
6 Proppants Market Share, 2012 116
7 Chemicals & Gases Demand by Type, 2012 122
8 Chemicals & Gases Market Share, 2012 140
9 Other Fluids & Materials Demand by Type, 2012 143

SECTION V -- SERVICES
1 Shale Services Demand by Type, 2012 150
2 Drilling Services Demand by Type, 2012 159
3 Services Market Share, 2012 164

SECTION VI -- REGIONS & PLAYS
1 Shale Products & Services Demand by Region, 2012 188
2 Shale Products & Services Demand by Principal Play, 2012 199

SECTION VII -- INDUSTRY STRUCTURE
1 Shale Products & Services Market Share, 2012 244

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