• Accident News For Roughnecks

    Shale Rig Owner Touts New Price Model as Drilling Speeds Up

    The biggest provider of oil and gas rigs to the U.S. shale patch is pushing a new pricing model as speedier drilling cuts into contractors’ revenue.

    Rig ResetRigs are typically rented out at a daily rate for a period of a few months, which has meant less money for oilfield service providers as drilling becomes quicker and more efficient. So Helmerich & Payne Inc. is touting a new pricing model based on overall well performance, and almost a third of its U.S. rigs are now being leased on that basis, Chief Executive Officer John Lindsay said Wednesday on an earnings call.

    “The industry really has to evolve,” Lindsay said. “We’re really focusing on a lifetime value of that well bore for the next 10 or 15 years, and I think that is really drawing some attention. We’re seeing some opportunities to continue to grow these new models with our customers.”

    After the worst crude-price crash in history pummeled the oil industry, the tussle between producers and contractors over the cost to drill and frack wells has taken on greater urgency. Explorers are under increasing pressure to cut spending and return cash to shareholders, and drilling is becoming vastly more efficient as a result.

    READ MORE AT ROUGHNECK CITY NEWS ⇨

    Fracking Ramps Back Up As Crude Oil Becomes A Hot Commodity Again

    The slow but steady growth seen by the U.S. oil and gas industry throughout the final four months of 2020 intensified in January, as oil prices saw double-digit increases.

    Pump JacksSince January 1, the price for West Texas Intermediate has risen from $48.52 to over $58 as of this writing on February 9, a gain of more than 20%. According to Otavio Costa, a portfolio manager at Crescat, this is the strongest year-to-date performance for crude oil prices in the last 30 years.

    The stronger price scenario has, as it generally does, led to rising numbers of active drilling rigs and frac spreads in the U.S., as upstream companies redirect more capital spending to their drilling programs. Last week, Baker Hughes reported that its rig count rose for the 11th straight week, and 22nd of the last 23 weeks. The total number of active oil and gas rigs in the U.S. as of last Friday is now 392—or 398 less than the same week last year.

    Thus, the industry has now recovered to almost half the active rigs of a year ago, but that is more than twice the number of rigs that were active as of September 1, 2020. That’s an obvious sign of recovery, and the same is true in the Primary Vision count of active frac spreads currently working. That count as of Feb. 5 sat at 175 active fracking crews and equipment arrays working in the U.S., up from 85 as of Sept. 1, but 45% below the level of a year ago.

    READ MORE AT ROUGHNECK CITY NEWS ⇨

    Oil and gas workers fight to regain footing during oil bust

    Merlin McCalister has worked in oil for 23 years. He’s been here before.

    “It’s not my first time going through the roller coaster of the oil and gas industry,” McCalister said,

    But he hasn’t been here before.

    Oil and gas workers fight to regain footing during oil bust“I didn’t think it was going to be this bad, but once COVID crossed over the water and got to us here, I knew we were in trouble,” he said.

    COVID-19 caused an already bad situation to get worse. In April, crude prices went belly-up, falling more than 300% in a single day.

    “The personnel on the rigs started getting let go,” McAlister said. “Some of our rigs started stacking up. Some of the guys started getting sick on the rigs. So, there was no work for us.”

    By the middle of summer, McCalister lost his job as a safety specialist. With five kids to support, money got tight.

    “Very little Christmas and no birthdays this last year, pretty much.”

    And while his children took it in stride, it was McCalister who worried.

    READ MORE AT ROUGHNECK CITY NEWS ⇨

    200 workers stranded on Petronas oil rig after Myanmar coup

    Around 200 workers on a Petronas oil rig have been left stranded in the Andaman Sea since the Myanmar military staged a coup earlier this week.

    The workers hired by a contractor working for Petronas have had to stay out at sea longer than the usual 40 day period since the Covid 19 pandemicMingguan Malaysia reported that workers on the Yetagun oil rig have lost contact with ground control and the Malaysian embassy since Monday.

    One worker, who has been on the platform for four months, expressed concern over their declining food and gas supplies, which are only expected to last them until Feb 10 or 11.

    According to the staff member, all workers were hired by a contractor working for Petronas and have had to stay out at sea longer than the usual 40-day period since the Covid-19 pandemic.

    While some of them have successfully been sent ashore, many were still waiting for a helicopter to pick them up.

    READ MORE AT ROUGHNECK CITY NEWS ⇨

    Oil rises 1%, hits highest in a year on growth hopes, OPEC+ output cuts

    Oil prices rose about 1% on Friday, after hitting their highest in a year and closing in on $60 a barrel, supported by economic revival hopes and supply curbs by producer group OPEC and its allies.

    Oil rises 1%, hits highest in a year on growthOil was also supported as U.S. stock markets hit record highs on signs of progress toward more economic stimulus, while a U.S. jobs report confirmed the labor market was stabilizing.

    Brent crude ended the session up 50 cents, or 0.9%, at $59.34 after hitting its highest since Feb. 20 at $59.79. U.S. crude settled up 62 cents, or 1.1%, at $56.85, after reaching $57.29, its highest since Jan. 22 last year.

    U.S. crude futures gained about 9% this week, the biggest percentage gain since October, in part due to U.S. inventories last week dropping to levels last seen in March.

    Brent rose about 6% for the week.

    “Brent is eyeing the $60 level now that OPEC+ has successfully eased most supply side concerns and optimism on the COVID front improves globally,” said Edward Moya, senior market analyst at OANDA in New York.

    READ MORE AT ROUGHNECK CITY NEWS ⇨

    Patterson-UTI ‘Increasingly Confident’ Rig Count Climbing, with Texas E&Ps Moving to Dual-Fuel Equipment

    Drilling and completions expert Patterson UTI Corp. is running 70 rigs today across the Lower 48, up three from the January average, and more equipment is likely to ramp up in the months to come, CEO Andy Hendricks said Thursday.

    Patterson UTI Rig CountHendricks, who discussed the outlook during a fourth quarter conference call, said the company’s rig count should remain “flattish” through the end of March.

    “But it’s not a top, not a plateau,” he told investors. ‘It’s just where the quarter is going to land as we look forward to the rest of the year. I anticipate we’ll be putting up more drilling rigs.”

    In addition, the rig dayrates are rising, with a forecast they will average $21,000/day in 1Q2021, up from the past couple of quarters. 

    “We thought that we would see a margin bottom for our business sometime around the fourth quarter or first quarter,” the CEO said. “Our visibility right now is that this is likely the first quarter, and that we should see improving margins throughout 2021.” 

    Management’s optimism about 2021 prospects is not based on where West Texas Intermediate (WTI) oil prices are trading today, he said, “but based on where WTI was trading earlier in the quarter. 

    READ MORE AT ROUGHNECK CITY NEWS ⇨

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