We hope everyone had a safe and happy Thanksgiving.

In light of a quiet week, we have a brief note this evening with an emphasis on DEP Upcoming Events.  This coming week we will conduct an update on the CT market which we’ll summarize in next weekend’s note.  Finally, given continued rig count gains, as well as WTI returning to the mid-$40’s, we are modestly raising our U.S. land rig count forecast.

Interesting Observation:  The Capital One Energy Conference will be held virtually on December 7-9th.  The event will feature ~80 presenting companies.  Friends at the firm report investor registrations are up 50% y/y.  That’s a nice sign and we hope the Capital One team crushes it.  Also, given the vast number of companies participating at the event, there’s a decent probability some of them will file updated investor slides, so be on the lookout for company news late next week or the following Monday.

U.S. Rig Count:  Another nice gain in the BKR weekly rig count which increased 10 rigs to 306 rigs.  The largest gains were again concentrated in the Permian (+5 rigs) as well as in the Haynesville (+3 rigs).  If the rig count held flat at today’s level, the Q4 average would be ~292 rigs, or +20% q/q.  Most likely, however, the rig count will see continued improvement this month, therefore, we would envision a q/q improvement closer to 25%.

DEP U.S. Land Rig Forecast.  In light of the strength in Q4 rig reactivations and a return of the CY’21 strip to $45/bbl, we are amending our rig count forecast higher.  We raise the near-term view, but make little change, for now, to our 2H’21 view.  At this point, we believe a sustained $45-$50 price is needed to lift the rig count into the high-400 range.  That said, we expect the rig count to move higher in 2022 as we take the over for a ~$45-$50 environment quarters from now.  For 2021, we surmise E&P budgets will be based off a low 40’s price deck while investor calls for continued capital discipline should lead to public E&P capex restraint.  As a reminder, public E&P’s need to demonstrate positive free cash flow and return that cash to shareholders via debt reduction and/or special dividends.

Permian Frac Crew Count:  We updated with local contacts on Permian frac activity as we didn’t have time to do this during our Permian trip last week.  This bottoms-up forecast highlights an active crew count in the vicinity of ~72-74 crews.  We would anticipate the crew count migrates into the high ~70 range in the coming weeks, particularly with the recent strength in oil prices.  The active crew count is spread amongst 17 frac companies and 43 E&P companies.  Of note, the Permian rig count now stands at 161 rigs per BKR.  Assuming a normalized rig/crew ratio in the ~2.25x to 2.50x range suggests the Permian frac crew count should settle in the 65-75 vicinity.  That said, we believe the Permian rig count likely moves into the low 200 vicinity during Q1, thus arguing for closer to 80-90 frac spreads in the basin.  As for the U.S. frac crew count, industry contacts and field discussions lead us to believe the U.S. active crew count is in the ~160 vicinity (active, not necessarily effective).  Under our forecast, we believe the U.S. rig count rallies into the low 400 range in 2021, thus suggesting a U.S. frac crew count in the 180-200 vicinity.

Upcoming DEP Events:  Thankfully 2020 is quickly coming to a close.  Nevertheless, there is still time to squeeze in a few more DEP events.  First, we’ll host our annual Christmas BBQ Social on December 9th followed by our first semi-annual Fort Worth Golf Outing on December 15th.  We still have a few slots for golf, so let me know if you are free and would like to play.


Looking to next year, numerous events are on the calendar so as you finalize your 2021 marketing and investor relations budgets, please consider participating at a few of our outings and conferences.  Two of the major industry events will be the THRIVE Energy Conference which will be held at Minute Maid Park on February 25-26th as well as our Permian Basin BBQ Cook-Off which is expected to be held on September 28th in the Midland/Odessa area.  For the THRIVE conference, we will feature indoor and outdoor booths as well as conference sponsorship opportunities.  For the growing list of sponsors who have already committed, we really appreciate your support.  For those on the fence due to COVID, we get it.  Here’s our pitch, so please hear us out.  First, if the event were to be cancelled, we will give you a full refund.  That said, we don’t expect a cancellation as there is tremendous social distancing space within Minute Maid Park.  Second, headcount this year is limited; we will require face masks; and we will take temperatures at the door. Also, multiple rooms within the stadium will have AV set-ups in order to allow folks to watch the panels remotely.  Finally, the roof can be opened, thereby making this an outdoor event.

With respect to the Permian BBQ Cook-Off, we are looking for companies who wish enter cooking teams.  We anticipate cooking spots for ~35 smokers.  Please know, however, DEP Gold+ subscribers will be given priority preference for these slots.  Recall, the 2019 event had over 1,500 attendees, thus a fantastic marketing event and for cooking teams, a great venue to entertain clients.  Finally, for those wishing to display equipment at the BBQ, this will be an option as well.

For those seeking investor outreach, we will host our London Energy Day in June.  This is a small event which will feature a historic London Pub Tour and then a day of 1×1 meetings with London investors.  In late August, we will host our European Energy Conference at the Gleneagles Resort in Scotland in August.  At the Permian BBQ Cook-Off, we will secure a venue to host a day of 1×1’s for investors and will reach out to individual companies who may wish to host facility tours.  Meanwhile, throughout the year, we intend to host regional field tours as we try to rebuild investor support for the industry.

DEP Event Schedule:

Christmas BBQ Social – Houston – 12/9

Fort Worth Golf Outing – Fort Worth – 12/15

THRIVE Energy Conference – Minute Maid Park – February 25-26

Kingwood Golf Outing – Kingwood – April

Fort Worth Golf Outing – Fort Worth – April

Whistling Straits Energy Forum – Kohler, Wisconsin – May 25-26 (limited attendance)

London Energy Day & Pub Crawl – London – June 14-15

OKC Steak & Baseball – Oklahoma City – July 2021 (waiting for baseball schedule)

European Energy Conference – Gleneagles Resort, Scotland – August 30-31

Permian Basin BBQ Cook-Off – Midland/Odessa – September 28 (DEP will begin looking for cooking teams soon).

Kingwood Golf Outing – Kingwood – October

Houston Beer Social – Houston

Fort Worth Golf Outing – Fort Worth – October

This list does not include our regional small-group dinners.  All events are invite only.


Daniel Energy Partners is pleased to announce the publication of its first market research note. In this note, we reached out to executives across the oil service and E&P sectors to gauge leading edge sentiment.

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