The past two years have been slow for the oilfield industry as prices fell significantly. Things are now looking up as shale drivers have added 158 rigs since May which has grown the need for oilfield service companies drastically. What has caused this drastic increase in needed rigs? Sand. Yep, that’s right.
Oilfield Fracking Increase
With fracking, more and more sand is being pushed into wells, pushing the search for oil and gas miles and miles further down than could be done before. This has skyrocketed sand prices to $24 a ton. According to Crain’s Cleveland Business, the increased need for sand has analysts projecting spending by drillers to be $1 billion higher.
Oilfield companies are quick to jump on the bandwagon of products to make sure their services are always needed. Many now provide the sand, water, chemicals, and even diesel needed to power the drills. This not only helps them out but help the shale drillers to get all of their needed supplies from a one-stop-shop. They can even offer mapping, cementing wells, and resurrecting old reservoirs.
With the demand for oilfield services increasing, so are the prices to use them. This has caused a bit of an argument between service providers and oil explorers and where the prices and payments should be. Halliburton Co. (the largest fracking service provider in the world) and BP Plc have been in talks about service costs. Bob Dudley, chief executive officer for BP Plc told Halliburton that he wants the recent 75% drop in costs that were won during the market drop to stay in place even if oil prices keep rising.
Oilfield Contractors
Oilfield contractors are going where the money is partnering with equipment makers to lower their own costs and create a simple process for oil explorers. This will offer explorers a more inclusive package of services that will keep both sides happy. Oilfield companies are even going as far as to purchase manufacturing companies to have full ownership of both operations.
If your business is in the oilfield industry, think of the possibilities 2017 can bring. Your business could offer comprehensive services for explorers that will both save you money and make your business grow. If you oilfield company doesn’t offer sand, water, or chemicals in addition to rigs, now is the time to do it! What about a partnership with an equipment manufacturer? This could increase sales for your business as explorers would love to get everything they need from one company.
Grow your Oilfield Company
If your business is in high demand for oilfield services for fracking, you could use some extra working capital. Strong cash flow is important when working with multiple explorers that now need more than just rig services. If your oilfield business could use some extra money each month to cover the cost of supplies and payroll, we can help. We can get your business partnered with an invoice factoring company that can advance your business funds on its open oil invoices. We have relationships with many oilfield factoring companies. They can get your business advanced funds whenever you need it.
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