Big Frac Retirements

This week, we’re highlighting some of the trends related to the recently announced merger between LBRT and Schlumberger’s OneStim unit. Most notable, in our view, is the hard retirement of over 1 million horsepower (HP), leaving less than 16 million HP of total industry capacity (lowest since 2013). As it relates to LBRT / OneStim specifically, the combined fleet will be better positioned in the Permian, particularly among E&Ps that are pushing for efficiency and lining up a heavy 2021 completion year (lot of DUCs!). Lastly, we take a look at Permian sand demand (LBRT also acquiring 8 MM tons capacity), noting a recent surge in volumes, with some mines returning near February levels.

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