Well Stimulation Materials Market to 2018


Dallas, TX -- (ReleaseWire) -- 07/10/2014 -- Growing shale gas, tight oil production to drive gains

The rapid growth in production of unconventional resources like shale gas and tight oil has had a ripple effect throughout the US economy. After years of declines, US crude oil production is rising again and abundant low cost natural gas resources are rejuvenating the US manufacturing sector. This will provide opportunities for manufacturers of well stimulation materials across the board as oil and gas operators continue to require large amounts of proppants, as well as chemicals like biocides, guar gum, and surfactants.

Rising natural gas prices to boost gas production

Historically, the well stimulation market was focused on the stimulation of mature wells. However, success in the Barnett Shale in the early 2000s with techniques such as horizontal drilling and hydraulic fracturing led to increased stimulation of new wells upon completion. Today hydraulic fracturing is used during the completion of nearly all new wells in the US, both unconventional and conventional, although product use per well is significantly lower for the latter. While activity has cooled somewhat in gas producing areas in recent years due to low natural gas prices, operators have focused instead on liquid-rich formations, more than making up for any decline. Moving forward, as natural gas prices climb, operator activity — and well stimulation material demand — in areas with substantial gas deposits is expected to accelerate.

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Increasing well depths among product sales drivers

Product sales will be driven not only by overall levels of industry activity but also by increasing well depths and continued efforts to maximize well output and increase completion efficiency. The continued use of high volume hydraulic fracturing will require significant amounts of fracturing fluids and proppants. As plays enter the development stage, operators will work to optimize their process designs, which will lead to continuing changes in the types of proppants and fluids used. For example in recent years gelled fluids lost ground to slickwater formulations but now operators are moving away from slickwater in some areas in favor of hybrid fluids or other products that improve well output while minimizing environmental impact. A significant amount of this new unconventional resource development is taking place in areas that were not traditional hotbeds of oil and gas activity. For example, despite years of steady oil and gas production, North Dakota and Pennsylvania were not considered major oil and gas producing states until the development of the Bakken and Marcellus formations, respectively. As a result, a number of new proppant production and storage facilities have opened in these states.

Aging wells to benefit restimulation materials

As existing conventional wells continue to age and a number of wells in emerging unconventional formations reach maturity in the coming years, average per well output will fall as the number of new wells is unable to offset the production declines in legacy wells. This will result in a greater number of wells requiring restimulation, creating healthy demand for products utilized in these activities. Additional well stimulation material sales opportunities will present themselves should production from plays with considerable potential, like the Monterey and Wolfcamp, become commercially viable over the next 10 years.

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Company Profiles

Profiles 51 US industry players such as Air Liquide, Ashland, BASF, Baker Hughes, CARBO Ceramics, Dow Chemical, Ecolab, Halliburton, Linde, Weatherford International & Solvay

Additional Information

This study analyzes US manufacturer-level demand for proppants, chemicals, and other materials used in the stimulation of oil and natural gas wells for the purpose of increasing production output. Product sections are as follows: proppants, base fluid materials, fluid additives, and other materials like explosives and frac balls. The products encompassed by base fluid materials and fluid additives are somewhat different than in previous versions of this report. In this iteration, base fluid materials are all those products that are essential to the production of a fracturing fluid, while fluid additives are those that enhance the performance of a fluid or solve performance problems. Excluded from the scope of the study are well stimulation services. As a result, the market data presented in this study may differ from other estimates that utilize different definitions and encompass additional or different products. Additionally, although large amounts of water are used in hydraulic fracturing, water is excluded from the scope of this study.

Historical data (2003, 2008, and 2013) and forecasts for 2018 and 2023 are provided for sales of well stimulation materials at the aggregate level, valued in millions of current US dollars, including inflation. The term “demand” refers to “apparent consumption” and is defined as shipments (also referred to variously as “production,” “output,” or “supply”) from domestic manufacturing facilities, plus imports, minus exports. It is used interchangeably with the terms “market,” “sales,” and “consumption.”

In addition, major US manufacturers of well stimulation materials are identified and profiled, and the key competitive variables are discussed. The entire report is framed within the US oil and gas industry’s economic, technological, and market environments. Environmental variables affecting well stimulation material supply/demand patterns — especially crude oil and natural gas well completions — are also considered.

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