Big Risk From little-Privates

The number of private operators is declining rapidly (down 15-20% YTD), which is not being appreciated in the overall rig count data (down modestly YTD), and will be a BIG negative headwind on OFS activity in 2019. While ‘BIG-Privates’ (4+ rigs) have been firm, a larger group of ‘little-Privates’ (0-3 rigs) have been cutting rig count for the last 9-months with a further acceleration lower in March. Although some of the drag has already been reflected, completion activity for little-Privates could take a further step-down in 2H19 if rig count does not increase soon (frac activity lags 80-120 days after spud date).

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