It’s a big week in Houston with NAPE in town, and we were thrilled to welcome our good friend David Bat, President of Kimberlite Research, for an in-depth discussion of the latest OFS activity, trends, and technologies. David joined Kimberlite in 2015 and holds over 30 years of experience spanning upstream, power, and oilfield research. Kimberlite is a global oil and gas market research and consulting firm that gathers insights from more than 20,000 hours of annual interviews with industry professionals to analyze market trends and benchmark performance for oilfield equipment and service providers. We were excited to hear David’s perspectives on the evolving OFS landscape.
In our conversation, David provides background on Kimberlite’s unique approach to gathering high-quality data from E&P operators and oilfield service users worldwide. He explains how their methodology offers deeper insights into technology adoption, service quality, and operational performance and walks us through key slides from a presentation (full version linked here). We explore recent technological advancements including rotary steerable systems improving drilling efficiency, self-oriented perforating guns enhancing completion effectiveness, and advancements in electric submersible pumps. We discuss how digitalization, software applications, and AI-driven analytics are reshaping oilfield operations as well as trends in frac technology, oilfield electrification, and shifts in fuel choices. David shares factors driving operator recommendations and highlights the contrast between North American and international markets, the potential for unconventional growth in Argentina, Australia, and the Middle East, the resurgence of offshore developments, and the challenges that prevent certain innovations from gaining widespread traction. We explore broader key industry themes, including consolidation trends in oilfield services, how company culture influences service provider success, the growing role of mobile power solutions across both oil and gas and non-energy sectors, and AI’s role in data aggregation, market intelligence, and operational decision-making. We end by asking David for his vision of the oil and gas services industry in the next decade. This is where he makes a great comment about “differentiation and an improving competitive moat” around the best companies. It was a wide-ranging and thought-provoking discussion and we’re very grateful to David for sharing his expertise with us.
Mike Bradley kicked off the discussion by highlighting that market volatility seems to be driven by on an almost hourly or at least daily basis by Trump’s latest Executive Orders and policy initiatives. On the bond market front, the 10-year bond yield remains stuck in the 4.5%-4.6% range and recently seems less influenced by economic data and more by Trump’s initial tariff threats and short-term tariff agreements. On the crude oil market front, WTI price has recently been rangebound in the low-$70s/bbl. Monday’s OPEC JMMC Meeting concluded with an agreement to continue with their previous Declaration of Cooperation plan (keep current production curtailments through April). WTI price bounced on Tuesday due to rumors that Trump could soon be looking at reimposing Iranian oil export sanctions. On the broader market front, the S&P 500 is up ~2% YTD despite all the recent heightened volatility. He noted that market volatility increased last week due to the DeepSeek AI news and this week due to Chinese tariff implementation and on/off news on the Canadian/Mexican tariff front. On the energy equity front, the Three Big Oil Services firms (BKR, HAL & SLB), in aggregate, guided 2025 NAM growth towards a low-single digit decline and International towards flattish growth (weakness in Mexico and Saudi). Several Oil Majors have recently reported and have guided to modest 2025 production growth with an emphasis on shareholder returns. The three largest U.S. refiners (MPC, PSX & VLO) have reported Q4 results and are signaling a more optimistic 2H’25 global refining outlook. He ended by flagging that many E&Ps are set to report Q4 results over the next couple of weeks and that investor expectations are for conservative 2025 capex budgets, flattish/low-single digit production growth and a heavy emphasis on shareholder returns. Jeff Tillery also joined and added his perspectives and questions to the discussion.
Our best to you all. We hope you enjoy the show as much as we did!