The Pressure Pumper of the Future

Even before the current industry downturn, pressure pumpers were facing challenging conditions. Concerns about sustainable activity levels in US unconventionals were growing and demand was trending down. The market was already oversupplied and fractured, though positive signs were emerging as players began to exit the market and reduce capacity. Frac pricing was weak and near or at historically low levels. Pressure pumpers had seen continued margin erosion due to lower pricing and decoupling of sand and chemicals despite steadily improving operational performance. Almost all pumpers faced declining per fleet EBITDA levels and both public investors and private capital had shunned the industry.

The dual hit of COVID related demand destruction and OPEC+ led supply increases led to one of the most rapid demand destruction events in history, with national frac counts rapidly dropping to as low as around 50 spreads. For many pumpers, these events could not have found them more ill prepared, as both public and private companies faced balance sheets that were already raising questions on the need for widespread restructurings in the sector.

• Why have pumpers not benefited from continuous improvements in operational performance?
• How will adoption of technologies such as electric frac and dual fuel be impacted?
• How can pressure pumpers adapt to meet the ESG goals of their customers and the expectations of the investor community?
• How could changes in the regulatory environment impact pressure pumpers?
• How will the changed landscape of the future impact industrial companies who supply to the industry and suppliers of consumables such as sand, chemicals, iron, and fluid and power ends?
• Given the structural problems of the sector, debt loads, and the likelihood of both incredibly challenging near-term conditions and lower long-term demand levels, how can pressure pumpers adapt to the new normal?
• What does the pressure pumper of the future need to do to succeed in a transformed market?

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