OFS Metrics

Update: EnergyPoint’s latest four-star ratings are now posted. Total customer satisfaction ratings for over 100 major suppliers to the oil and gas industry are included. The list includes stalwarts like Schlumberger, Halliburton, Baker Hughes, Weatherford and NOV… as well as top-rated names like Helmerich & Payne, ChampionX, Newpark Resources, Core Lab and MPLX | MarkWest.

Recent adds to the list include Borr Drilling, Ulterra, Varel, Flowserve, InterMoor, Nine Energy Services, Archer, Alta Gas and others.

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Customer Ratings — Global Energy Industry Suppliers EnergyPoint Research publishes customer satisfaction ratings for energy industry upstream, midstream and downstream suppliers.

While strong customer satisfaction is always a feather in a contractor’s cap, it’s especially so in the early phases of a recovery in the oilfield. As the improving conditions unfold, top-tier contractors—like Maersk Drilling, Valaris and Borr Drilling in the offshore, and Helmerich & Payne, Precision Drilling, and Independence Contract Drilling in the onshore market—can expect to enjoy faster revenue growth, healthier margins, increased customer loyalty, and stronger market-share gains. This will prove especially true as an improving outlook pushes customers toward longer-term contracts.

This is the fourth in a series of posts summarizing results from EnergyPoint's recently released 2021 Contract Drillers Customer Satisfaction Survey.

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WSJ writes larger shale drillers, in the past the oil world’s swing producer, are largely standing pat as oil and gas prices rise. Instead they plan to focus on reducing debt. Some are socking away money to return to investors in the form of variable dividends.

The U.S. is producing roughly 2MMBPD less than it was before the pandemic. The number of active rigs drilling for oil stands at 376, down from 683 pre-Covid-19. Shale companies have dipped into their DUCs, rather than drill new wells, to help maintain output cheaply.

In the heyday of the shale boom, publicly traded oil producers typically reinvested more than 100% of the cash flow they made from operations back into drilling campaigns. Now they are using about half of the income they generate on new drilling and are only growing output slightly, if at all.

The newfound discipline has attracted some investors that haven’t traditionally invested in energy, seeking energy exposure as prices rise.

Our Take: Yes, shake E&Ps have been forced to rein in spending and live within their means after investors lost faith in them following years of poor returns. But there's a large group of private players who aren't as constrained. Might they start ramping up now that cash flow is at all-time highs?

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Challenges in the oil and gas industry have been numerous over the last few years. One of the few bright spots is the high level of customer satisfaction that’s emerged in the oilfield products sector. Total satisfaction ratings for major providers in EnergyPoint’s 2021 survey is a historically healthy 7.56 on a 10-pt scale.

Customers are most satisfied with suppliers and their offerings in the dimension of engineering and design (E&D), followed by performance and reliability (P&R). Within engineering and design, top-rated sub-attributes are the degree to which products and upgrades are value-adding, and technical soundness and sophistication of products. Within performance and reliability, it’s the ability to perform to specifications and expectations rated highest.

Companies rating in the top ten in both E&D and P&R include Cactus Wellhead, ChampionX (Apergy), Gardner Denver Pumps, Nippon Steel, Oceaneering, Pason Systems, and TAM International.

This is the second in a series of posts based on findings in EnergyPoint's 2021 Oilfield Products Ratings & Analysis Report. Read more: http://ow.ly/6eJ350FrvS9

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