U.S. demand for hydraulic fracturing services continues to rise along with shale exploration, but customers indicate they are less satisfied with these services in comparison to other completion-related services they receive, according to a recent survey by EnergyPoint Research.
The potency and cleanliness of hydraulic fracturing capabilities continues to increase thanks to technological advances, and nominal hydraulic fracturing capacity looks on pace to grow by 25 percent or more in 2012.
However, the current environmental and political climate has prompted suppliers to invest heavily in both new fracturing technology and equipment, adding to costs at a time when customers are already nervous about low natural gas prices.
The ramification has been that in the high frac-intensive North American land market, the industry's "Big Three" – Halliburton, Schlumberger and Baker Hughes – have seen their customer satisfaction ratings fall to materially low levels over the last 24 months, EnergyPoint reported.
Market leaders in the frac space are working hard to differentiate their services in the minds of customers, EnergyPoint noted.
"Centralization of crews and resources, packaging of proppant technologies, use of proprietary materials to redirect hydrocarbons around proppants, and deeper blasts into rock formations are all part of today's next-generation approach to the high-profile service.," EnergyPoint added.
However, domestic customers still seem relatively disenchanted with suppliers' performance despite all the "super fracking."
Halliburton, the largest U.S. market shareholder, will hold 2012 capacity additions steady with 2011 levels, while Schlumberger and Baker Hughes seek to step up domestic capacity and extend their footprints internationally. The shortage of frac capacity has also encouraged some integrated providers to require bundled purchases from customers in exchange for the right to access their in-demand frac crews.
"Alas, the previous EnergyPoint analyses suggest this only serves to rankle customers further," EnergyPoint commented.
Limited customer evaluations gathered by EnergyPoint indicated that second-tier service players such as FTS International, Trican and Weatherford International could have an opportunity to move deeper into unconventional shales, given the capacity shortage for hydraulic fracturing services.
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