HOUSTON, Dec. 4, 2014 /PRNewswire/ -- PacWest
Consulting Partners, now part of IHS Inc. (NYSE: IHS), today
announced it will host a conference call on Thursday, December 11, 2014 at 9:30 am CST to discuss its market outlook from
its latest WellIQ and PumpingIQ reports.
In addition to the forecasts contained in these latest, leading
reports on drilling and completion activity and hydraulic
fracturing -- published October 24
and November 14 of this year,
respectively -- PacWest will present a revised set of downside
forecasts that reflect changes in the market since
Thanksgiving.
The North American market for hydraulic fracturing services is
preparing for a downturn in 2015 due to rapidly falling oil
prices. Service providers and equipment manufacturers report
that the market and their customers have not yet changed, but all
expect changes in the immediate future and are developing plans to
deal with the downturn.
In its revised downside scenario, PacWest expects a 12 percent
decrease in the number of horizontal wells frac'ed in the US Land
market in 2015 and an 8 percent decrease in frac demand for 2015.
These figures represent a significant downgrade from the base case
scenario forecasts published in the recent WellIQ and PumpingIQ
reports – a 6 percent increase in the number of horizontal wells
frac'ed and an 8 percent increase in frac demand for
2015.
Despite the imminent downturn, equipment delivery books still
appear strong for 2015, particularly for the first half of the
year. In its base case scenario, PacWest expects 1.4MM horsepower
(net capacity additions) to be delivered into the US Land market in
2015, representing an 8 percent increase in hydraulic fracturing
capacity from the previous year. However, in its revised downside
scenario, PacWest expects only a moderate reduction in net capacity
additions, from 1.4MM to 1.1MM horsepower. In this scenario,
PacWest expects some H1 2015 orders to be delayed to H2 2015 and
2016 and some orders to be cancelled.
Falling frac demand and increasing frac capacity will quickly
lead to falling capacity utilization in 2015. This will create
challenging market conditions for many service providers and
equipment manufacturers.
"The frac industry is preparing for a tough 2015," said
Ryan Carbrey, project lead at
PacWest. "Many service providers have just begun to see
improvements in pricing and margins. This downturn will drive a
focus on improving efficiencies and cost containment. Additional
industry consolidation is also expected."
PacWest will hold a conference call on Thursday, December 11, 2014 at 9:30am CST to discuss its outlook for the market.
Call details are provided below. The call is open to the
public.
Conference Call:
Dial-in: +1 (800) 830 3581
International Dial-in: (262) 320 4698
Passcode: 2922791
Presentation Link:
https://join.me/PacWest_Market_Update
For more information, contact Jennifer
Thomas,
713.929.3285, jthomas@pacwestcp.com.
About IHS (www.ihs.com)
IHS
(NYSE: IHS) is the leading source of information, insight and
analytics in critical areas that shape today's business landscape.
Businesses and governments in more than 165 countries around the
globe rely on the comprehensive content, expert independent
analysis and flexible delivery methods of IHS to make high-impact
decisions and develop strategies with speed and confidence. IHS has
been in business since 1959 and became a publicly traded company on
the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is committed to
sustainable, profitable growth and employs more than 8,000 people
in 31 countries around the world.
IHS is a registered trademark of IHS Inc. All other company
and product names may be trademarks of their respective owners. ©
2014 IHS Inc. All rights reserved.
About PacWest (www.pacwestcp.com)
PacWest
Consulting Partners, now part of IHS, is a strategy consultancy and
market intelligence firm that specializes in the energy,
industrial, and resources sectors. Much of its work is focused
around the oilfield and the many industries that supply critical
products and services to it. With the explosion of unconventional
resources in North America and
increasingly internationally, the energy landscape is changing
quickly. PacWest is at the forefront of the changes in the US and
in global energy markets resulting from the development of
unconventional oil/gas resources.
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SOURCE PacWest Consulting Partners