Permian Basin Fracking Decline Accelerates Amid Tariff Uncertainty and OPEC+ Production Hikes.

Permian Basin fracking is declining faster than expected due to tariff uncertainty and OPEC+ production hikes, according to ProPetro CEO Sam Sledge. There are now around 70 hydraulic fracturing crews in the world's largest shale oil field, with the number expected to drop further in the coming months. The decline is attributed to the lack of clarity around tariffs and the increase in production by OPEC+.

Permian Basin fracking is experiencing a faster-than-expected decline, according to ProPetro (NYSE:PUMP) CEO Sam Sledge. The world's largest shale oil field now has around 70 hydraulic fracturing crews, down from as many as 100 at the start of the year. This decline is primarily attributed to tariff uncertainty and increased production by OPEC+.

Sledge reported on the company's earnings conference call that the completions market in the Permian Basin is facing significant challenges. The CEO cited increased market uncertainty driven by tariffs and rising OPEC+ production as the main reasons for the decline. As a result, ProPetro has revised its FY 2025 capital spending forecast, reducing it by 9% at the midpoint from prior guidance to $270M-$310M, with the completions business accounting for $100M-$140M. This reduction reflects the anticipated decline in completions activity through the year's H2.

ProPetro expects to run 10-11 frack crews in the current quarter and may make further cuts in Q4. The company's stock price fell by 13.1% in Wednesday's trading after reporting a surprise Q2 GAAP loss and a 9% year-over-year decline in revenues to $326M.

The decline in fracking activity in the Permian Basin is a significant development for the energy sector, particularly for companies operating in the region. The uncertainty surrounding tariffs and the increased production by OPEC+ have created a challenging environment for fracking operations.

[1] https://seekingalpha.com/news/4474549-permian-basin-fracking-falling-faster-than-expected-propetro-ceo-says