A Survivor’s Guide to Oilfield Volatility — OFS Edition

So, what really happened last year? Our title really begs the question: Why do we need a survivor’s guide to 2020 if it’s over? It is important to review last year and analyze how we can adjust moving forward. We want to demonstrate that last year was tumultuous and we are still experiencing its consequences.  In early March 2020, two major events generated significant volatility in the industry: the COVID-19 pandemic and the price war between Russia and Saudi Arabia. These events demonstrated how volatile a place the oilfield is and reinforced the idea that the industry needs to be in a healthier state to handle these situations, as it will not be the last time we experience this type of volatility.  Enverus, as well as others, have covered extensively the reasons for the drastic volatility swings, so we won’t go over all these pieces individually. The graphic below provides a timeline of last year’s volatility. You see it begin in January, ramp up in February, and then we saw that the rest of 2020 had the steepest completion activity in two years as companies looked to unload capex.   A year in review What’s not in the timeline above, but added to the volatility, is a tumultuous administration change that led to a lot of questions regarding the future of federal lands.… continue reading

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