Given the cuts to capex resulting from the oil price crash, we expect changes in small diameter line pipe demand. In this segment, small diameter (<=16”) demand has shifted as drilling has evolved. In the period of 2005 – 2009, there were about 83 tons of small diameter line shipped per rig running. During this period, only about 24 of the rigs, on average, were drilling horizontally. More wells but smaller diameters. In the period from 2010-2014, there were about 101 tons of small diameter line pipe shipped per rig and about 60 of the rigs, on average, were drilling horizontally. Finally, from 2015 through the current period, about 150 tons of small diameter line pipe was shipped, per rig, and about 83 of rigs were drilling horizontally. Despite the move to horizontal where OCTG laterals play the role played by gathering lines historically, the shift to higher production per rig/well, as well as pad drilling, results in larger diameters and heavier walls within that size range.
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