Independent U.S. producers underspent their first-quarter budgets by as much as $2.5 billion collectively, largely because they couldn’t find enough fracking crews to handle planned work, according to research/consulting firm Infill Thinking.
If the scarcity continues, output increases planned for this summer may get pushed into 2018, creating an unanticipated production bulge with “scary” implications for oil prices, Joseph Triepke, Infill’s founder, told Bloomberg.
In some cases, crews are walking away from jobs they signed up for months ago – even when forced to pay early-termination penalties — to take higher-paying assignments with other explorers.
Workers earn anywhere from $29,000 to $72,000 a year before overtime, depending on the company and the region, Kallanish Energy learns.
The tight fracking market “means U.S. oil production growth this year will be back-half weighted, and we may not understand the full extent of U.S. production growth until early 2018,” Triepke told Bloomberg. “This point is particularly scary if you are rooting for higher oil prices.”
Oilfield service companies contributed the largest number of more than 441,000 jobs slashed globally as prices plunged from more than $100 a barrel in mid-2014, according to Houston-based industry consultant Graves & Co.
Now, with the price of oil settling at around $50 a barrel, shale drillers are once again gearing up. The result: rising competition for workers and equipment, which means higher costs. Fracking companies are now charging 60% to 70% more than a year ago as explorers engage in bidding wars to lock up crews, according to Infill data.
In response, servicers are scrambling to re-hire former employees and retrieve gear from storage, said Andrew Cosgrove, an analyst at Bloomberg Intelligence.