There was a recent piece that spoke about Big Oil’s managed decline that made me wonder whether such a development is actually happening. With so much going around it is crucial to separate “noise” from “signal”. When discussing whether shale is in “managed decline,” it’s crucial to look beyond surface-level metrics and understand what the underlying data actually tells us. That’s where Primary Vision’s two key indicators—Frac Spread Count (FSC) and Frac Job Count (FJC)—come into play. The FSC is a leading indicator of completion activity—it tracks how many frac spreads (composed of pressure pumping equipment, crews, etc.) are deployed at a given time.—essentially, it tells us what’s available on the supply side. Meanwhile, the FJC captures the number of actual completion jobs being performed each week, which gives us a clearer read on demand-side intensity. In other words, FSC shows how much equipment is in motion, and FJC tells us what it’s being used for.
What we’re seeing now—especially in the case of Exxon/XTO—is not a pullback in capability but an increasingly efficient deployment of that capability. Fewer spreads are accomplishing more jobs. That’s not decline. That’s evolution.
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