Energy Prospectus

Excerpt:

Hydraulic fracturing (fracking) in the Permian broke old records in June, according to energy research firm Rystad Energy, who estimates there were as many as 18 wells fracked per day in June.

Previously, fracking operations in the Permian peaked at 520 wells in August 2018. Rystad estimates almost 550 wells were fracked in June.

“The Midland platform has undoubtedly been the driver of this upwards trend with consistent month-over-month increases,” said Oleksii Shulzhuk, senior analyst on Rystad’s shale team. “According to our latest estimate, fracked wells totaled 339 in June 2019, constituting a whopping 70 percent growth since the first quarter of 2019, when an average of 200 wells were fracked per month.”

Nationwide, U.S. fracking operations saw a strong recovery in June with 49 wells fracked per day, an increase of five daily wells since May. https://www.rigzone.com/news/permian_fr ... 09-article

Now, if this could only help HCR ....

So, what will this do to production in Q3 and Q4? Are these just enough to offset declines, and thus keep production flat, or will they contribute to growth in total production?

<<Now, if this could only help HCR ....>>

Cf "Hi-Crush +4% on Q2 earnings beat"
<<https://seekingalpha.com/news/3488446-h ... nings-beat>>

HCR's earnings call slides here: https://seekingalpha.com/article/428253 ... all-slides

One quarter does not make a trend, but I'm hoping HCR's Q2 numbers show that Q1 was the bottom.

If Raymond James oil price forecast is even close to right, Hi-Crush and almost all of the oilfield services companies are going to do very well in 2020.

As we layer on more and more and more high decline rate horizontal wells it take more and more and more wells each year to offset the production decline that is increasing each year. Just take a hard look a the picture on the bottom of page two of the newsletter.

I will eventually get to Hi-Crush, but I have got to update all of the Sweet 16 and Small-Cap Growth Portfolio company forecast models first.

Having just read the HCR Q2 cc transcript, unfortunately my hope that we have seen the bottom appears too optimistic. They made clear that customers have told them the Q4 seasonal slowdown may begin a bit early this year, with a dip in completions activity expected late in Q3, and that contribution margins will remain pressured. On the bright side, they said July was a strong month, so at least one strong month is in the books. They sounded cautiously optimistic about 2020.