Stable Production Needs 165 Fleets

We have downloaded the latest well completion, intensity, and efficiency data. While extremely low activity has come in as expected (down 70% vs Q1’20), intensity and efficiency has been surprising, with operators still focused on big sand loadings and quick turnarounds. In fact, the average frac crew has been able to maintain loadings of >3 MM lbs per day, up 25% y/y, despite anecdotes of more 12 hour jobs and smaller pads. Plugging the latest efficiency data into our model, the US onshore could potentially see stable production at 8.5-9 MM bbl/d with ~165 fully-utilized frac fleets (vs 70-80 in May), while ~200 fleets would be needed to return to the previous peak (10.3 MM bbl/d – US onshore).

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