Pressure pumping expert ProPetro Holding Corp. is stepping up plans to deploy electrically powered completion fleets in the Permian Basin, with two of the region’s biggest operators signaling they plan to use them.
The Midland, TX-based oilfield services operator said it has revised purchase agreements with supplier AFGlobal to acquire an additional DuraStim hydraulic fracture fleet this year in addition to the two fleets previously announced. ProPetro also has an option to purchase up to three additional fleets to the end of 2020.
“We believe the DuraStim fleets represent the future of our industry and will drive down well costs for our customers while improving safety and the useful life of our equipment and reducing environmental impact,” CEO Dale Redman said.
The 6,000 hydraulic hp (hhp) DuraStim pump claims to provide the equivalent of three times the effective horsepower of a conventional fracture unit, while operating at around 10% of the cyclic rate. Each DuraStim fleet consists of 36,000 hhp and related power equipment.
“Upon deployment, we expect the DuraStim pump will offer many advantages, including a substantial reduction in fleet footprint and manpower, while dramatically extending equipment life and reducing maintenance costs,” ProPetro management said. “This novel system, when coupled with an electric drive, is also expected to deliver a reduction in fuel consumption and emissions.”
ProPetro also said two Permian heavyweight producers, XTO Energy Inc., which is ExxonMobil Corp.’s onshore exploration unit, and Diamondback Energy Inc., “indicated their intent to be the first in the Permian” to deploy DuraStim fleets.
The company expects to take delivery of the first DuraStim fleet before the end of the year.
The revised agreement with AFGlobal amends and/or replaces previous contracts to purchase a total of six DuraStim fleets, including four fleets that it committed to purchase in April.
ProPetro expects the first three fully deployed fleets to cost an aggregate of $180 million, with $97 million spent to date.
In addition to the DuraStim fleet commitments, ProPetro has also purchased two TM2500 gas turbines from Baker Hughes, a GE company (BHGE) to power the first two DuraStim fleets. In site conditions, each turbine generates 30 MW of power.
“We are excited that XTO Energy and Diamondback Energy are positioned to be first movers in deploying this transformational technology in the Permian Basin, and we are confident that our long-term relationship with AFGlobal and BHGE will allow us to continue to meet our customers’ evolving needs,” Redman said.
The company, which only works in the Permian, late last year scooped up the completions assets of Pioneer Natural Resources Co. and in turn agreed to provide pressure pumping services to the Lower 48 producer for 10 years. When the transaction was completed, ProPetro had 28 fleets with an estimated 1.415 million hhp operating in the Permian.
ProPetro, which launched an initial public offering two years ago, had fleet capacity at the end of 2017 that was 64% higher than at year-end 2016, reaching 690,000 hhp or 16 fleets, from 420,000 hhp or 10 fleets. It also maintained 100% fleet utilization throughout 2017. One newbuild fleet with 45,000 hhp was deployed in the final three months of 2017.