Demand for well stimulation materials in the U.S. is forecast to climb more than 10% annually to $15.2 billion in 2018. “Historically high oil prices and rebounding natural gas prices are expected to be the main factors promoting continuing growth in well completion activity,” said Lee Steinbock, analyst. “The use of newer technologies such as horizontal drilling and high-volume, multistage hydraulic fracturing will increase the amount of materials used per well.”
The development of unconventional resources is expected to continue unabated, resulting in further stimulus to product demand. Potential restraining factors include growing environmental concerns regarding the high volumes of fluids used in stimulation and the maturation of key unconventional plays. These and other trends are presented in "Well Stimulation Materials," a recent study from The Freedonia Group, Inc.
Well stimulation technologies have had a commercial presence for more than 60 years, but for much of that time they were used fairly selectively. A number of factors have combined to transform well stimulation from a niche technology to one of the most common oilfield activities. A major reason for this paradigm shift has been the emergence of shale gas and tight oil formations. Operators targeting these unconventional resources have embraced innovations such as advanced hydraulic fracturing in order to increase per-well output. Technological advances have improved stimulation techniques to the point that their cost is nearly always justified by increased well productivity.
Proppants are by far the highest volume product type and also account for more than half of the market in dollar terms. Although raw sand dominates the market in terms of volume sales, value-added coated sand and ceramic proppants each account for a greater share of dollar demand. Resin-coated sand proppants are expected to register the fastest growth, as proppant loads continue to expand and operators develop formations with higher closure pressures. Gelling agents account for the highest dollar sales of stimulation chemicals and are expected to do so over the forecast period. However, due to a price correction for guar gum, sales of gelling agents are projected to be lower in 2018 than they were in 2013.