Infill Thinking Lifting the O&G knowledge curve
On March 7, National Public Radio addressed the Permian Basin’s explosive growth in a broadcast airing across 900 US radio stations.
Infill Thinking founder Joseph Triepke spoke with NPR for the piece, sharing industry insider perspective on West Texas drilling and frac’ing. While we gave a nod to the recovery, we also warned NPR’s audience about the “Permianflation” trend we identified as a risk back in November. This is a trend in its early innings out in the Basin today.
If you listen to sports talk radio or Johnny Cash instead of Marketplace and All Things Considered during rush hour, we’ve gotcha covered. You can catch the NPR story right here (audio may take a moment to begin playing):
In our Permianflation warning from November 2016, we wrote:
The first signs of Permianflation beyond acreage values are likely to appear in frac stage costs and land rig dayrates, where contractors are already starting to push modest increases through to customers. We will likely see it in labor costs as rising activity could quickly tighten the available labor pool. Permianflation could soon permeate ancillary services, consumables like water, sand, and chemicals, and SWDs too. And equipment, spares, and after market service costs will increase as deferred R&M is completed to gear up for activity increases.
Today, this is exactly what’s happening, and supply chain inflation is likely to continue to escalate in 2Q and 3Q as 2017 drilling programs are executed.
There’s a lot more to this story…
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