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NCS Multistage Holdings Idea Proposal (NCSM)

NCS Multistage Holdings Idea Proposal (NCSM)
 

Will NCSM’s sliding sleeve fraccing method gain share in the U.S.?

 

Report Available: December 13, 2017

 

Blueshift’s initial research found NCSM’s pinpoint fraccing method used in 7,800 wells with over 164,000 frac stages placed. The method is now used in almost 30% of the horizontal completions in Canada. In U.S. oil and gas plays similar sliding sleeve technology is only used 15% of the time and NCSM’s technology is present in less than 1% of U.S. well completions. Management projects that each 1% share in the U.S. presents an annual revenue opportunity of over $50 million. NCSM is currently conducting trials in the Permian basin with final results expected in early 2018. HAL provides strong competition for NCSM with its quality sliding sleeve product, currently utilized in the Bakken.

 

Observations

  1. NCSM’s Q2 results met expectations for EPS, while revenue outpaced forecasts by 27% with a 227% year-to-year increase. Improved commodity pricing was credited with driving increased oil and gas drilling and well completion activity.
  2. NCSM claims that its Multistage Unlimited technology is a more efficient and more economical alternative to plug-and-perf and ball-sleeve frac systems, delivering maximum reservoir drainage. With other fraccing methods there is limited control over perforation cluster location or size. NCSM’s technology provides pinpoint frac locations and exact proppant distribution. It also monitors frac-zone pressure in real time, allowing for on-the-fly adjustments.
  3. In preparation for anticipated growth and expansion, NCSM has embarked on some aggressive initiatives over the past 12 months. It recently completed the outfitting of a new manufacturing facility in Houston, taken a 50% ownership position in a precision machining company to ensure high quality and low cost sleeve production, started the renovation of a facility in Calgary to serve as its permanent technology center, and acquired Spectrum Tracer Services, which has a significant presence in the U.S.
  4. HAL uses a digital electronic sliding sleeve, one of the leading sliding sleeve technologies available. It has had a strong presence in the Bakken for years and may be a bigger game changer than what NCSM offers.

 

What is the difference in price for sliding sleeve vs. plug and perf? What is the difference in technology between HAL and NCSM offerings? How is NCSM doing in its effort to penetrate U.S. market? What percent of U.S. well completions will NCSM capture in 2018?  What is happening with 2018 E&P budgets? What obstacles must NCSM overcome to gain acceptance in the U.S.? What does NCSM need to do to experience the same success in the U.S. as it has in Canada? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: Completion engineers with E&P companies, Well completion companies, Completion consultants, and Industry specialists.

 

 

Companies: NCS Multistage Holdings (NCSM),Halliburton (HAL), Schlumberger (SLB), Dril-Quip Inc. (DRQ), National-Oilwell Varco Inc. (NOV), Forum Energy Technologies Inc. (FET)

 

Research Begins: November 13, 2017