Full Feature Blog

Is Pessimism Over Oil Well Productivity in West Texas Premature?

You may recall a recent post titled Steady as it Goes for Permian Basin Rig Counts where we shared April 2019 oil rig count data as supplied by Baker Hughes. We also asked the question, “Why has there been a slowdown in oil drilling?” and countered it was likely due to spending cuts from independent exploration and production companies. At the time, it appeared that crude prices would continue to go down. However, the latest rig-count report shows the number of oil rigs in the Permian Basin is holding mostly steady.

Let’s take a look at the most recent Baker Hughes report from August:

The U.S. Rig Count is down four from the last count performed in July of this year and down 104 from the count performed in August of last year. According to recent reports from Baker Hughes, Midland County, Texas, gained two rigs and the Permian Basin lost one. Texas is up one rig totaling 455.

See chart below for additional details.

Area Last Count (2019) Count Change from Prior Count Date of Prior Count (2019) Change from Last Year Date of Last Year’s Count (2018)
U.S. August 2 942 -4 July 26 -102 August 3
Canada August 2 137 +10 July 26 -86 August 3
International June 1,138 +12 May +179 June

Despite somewhat favorable results, there is still some pessimism regarding well productivity in the Permian Basin. Many firms fear the state of oil and gas well performance in West Texas due to the depletion of core inventory, growth in the share of child wells and well-spacing challenges. However, we discovered an article featured in Oil & Gas Journal (OGJ) that may shed some light on why that pessimism may be premature. In it, OGJ reports that Rystad Energy is holding firm on their outlook for the basin. In fact, Rystad’s Head of Shale Research, Artem Abramov, was quoted as saying, “We conclude that the average new production per well in the basin matches the all-time highs seen in early 2019 despite depletion concerns.” View the entire article here.

One potential downside associated with the increase of crude oil production in the Permian Basin is the likely increase in natural gas. According to World Oil, current constraints on natural gas pipelines may reduce oil drilling in areas that have heavy concentrations of natural gas. That said, Pipeline & Gas Journal reports that pipeline operator Magellan Midstream Partners LP expects new pipelines to be in the works to help improve the crude oil bottleneck in the Permian Basin.

Share your thoughts on today’s oil and gas news. How will it impact your business?

Tariffs Give Cause for Concern in Texas Manufacturing

If you were to thumb through some accounts of how tariffs are impacting the Texas economy, many would point to continued expansion and growth. According to the Texas Manufacturing Outlook Survey for June of this year, it would appear that Texas factory activity continued to expand and the production index went from 6.3 to 8.9. The increase marks favorable manufacturing conditions, yet the survey also indicated a significant drop in general business activity and positive company outlook. In fact, the company outlook index fell from –1.7 to –5.5, marking a new three-year low. The uncertainty index rose to 21.6, the highest it’s ever been since the metric was added to the survey in early 2018.

According to Emily Kerr, senior business economist at the Federal Reserve Bank of Dallas, “Tariffs are certainly a factor that’s driving up uncertainty and now we have explicit proof of that.”

What impact could we expect this uncertainty to have? Any uncertainty could lead to decreased customer demand, project delays and a sharp tightening of spending budgets, with fears of ultimately hitting manufacturing employment numbers square in the jaw.

While overall unemployment numbers are looking good, manufacturing employment fell 0.7 percent in May. Let’s take a look at what 115 Texas manufacturers had to say about the impact of U.S. and foreign tariffs.

  • 45 percent said tariffs aren’t affecting them
  • 41 percent said tariffs are already hurting their bottom line
  • 32 percent said they expect negative long-term impact
  • 30 percent said future costs are unclear
  • 21 percent said they don’t expect an impact
  • 18 percent said tariffs will give them a boost

Of those who answered “negative” to Current 2019 impacts, 54 percent reported passing those additional costs onto customers. Other answers included finding new domestic suppliers (17%) or bringing production or process back in-house (17%).

After digesting all those facts and figures, what does the future of manufacturing hold for Texas? Regardless of the actual impact tariffs are having on local manufacturers, the consensus appears to lean toward increased caution in the future regarding hiring, expansion and various expenditures.

What do you expect in the longer term and how will you prepare for the future? Let us know in the comments below. And, as always, if you need help finding the cutting tools and products you need for better productivity and profitability, contact us today. The pros here at M&M Sales & Equipment are happy to help.

What’s Machine Downtime Really Costing You? (And How to Avoid It)

Manufacturers often spend a lot of time focused on machine uptime and not nearly enough time monitoring downtime. Uptime, otherwise known as Overall Equipment Effectiveness (OEE), is comprised of three important components:Quality, Availability and Performance, according to SensrTrx. When any of these three are disrupted for any reason, machine downtime occurs. Machine downtime can be due to a number of reasons including regular maintenance and servicing, cleaning, changeovers, repair or unexpected equipment failure. Sometimes, companies have no control over downtime such as in the cases of extreme weather or power outages.

Regardless of the cause, unplanned downtime can mean a major financial impact on your company. Downtime can cost companies tens of thousands of dollars in lost production, if not more. Think about your production capacity. For simple math purposes, let’s say you produce 500 units an hour at a cost of $50 a unit. That’s $25,000 per hour. If your equipment is down for 4 hours, that’s a loss of $100,000 in potential revenue. That doesn’t even take into account decreased staff productivity, rescheduling costs and equipment replacement costs, not to mention decreased customer trust, according to Machine Metrics.

While an average cost of downtime is often factored into the price of manufactured goods, most companies often underestimate the cost of downtime and are surprised by their losses. Machine downtime is an unpleasant fact of life in manufacturing, but here’s what you can do to minimize loss.

Reduce Machine Downtime for Maximum Performance with These Tips:

  1. Perform a Risk Audit. Evaluate your current processes and equipment to spot potential problems before they lead to a downtime event. Ask yourself questions such as: How old is current equipment? How often is equipment serviced and maintained? Are parts reasonably available or do they take weeks to arrive? This regular audit will help you make more informed maintenance decisions and avoid costly repairs down the road, according to the blog BusinessTech.

  2. Create a Preventative Maintenance Schedule. Every piece of equipment needs to be repaired or replaced at some point. Without regular preventative maintenance, those unavoidable repairs and replacements will come at the most inopportune time. Instead of leaving it up to chance, be sure to schedule regular maintenance on integral pieces of equipment before they break.

  3. Use Quality Tools. To ensure maximum performance, use the right tools for the job. Using cheaper cutting tools or equipment may seem like a bargain at first, but those lesser-quality tools will result in more changeouts costing you time and money. The old saying of “you get what you pay for” has never been more accurate than when it comes to tools of the trade.

  4. Install Sensor Technology. When profit depends on your equipment running smoothly, you’ll want to be alerted the minute something is wrong with that machine. Sensor technology is available that can detect changes in vibration, temperature, heat and light and may offer you just enough time to address the issue before it leads to equipment failure, according to Sage Automation.

  5. Re-evaluate Data Collection Systems. Are you accurately tracking your operational data? Data is great for helping to make better business decisions, but only if that data is reliable and available. Uptime and downtime data are pretty arbitrary if your data isn’t accurate and timely. Consider implementing software that can help you collect and analyze data for real-time reporting, helping you make reduce production downtime.
     
  6. Regularly Train Operators. Even with the best maintenance program, human error is unavoidable. While it would be great to be able to blame equipment failure on a system breakdown, sometimes it’s all operator error. Avoid unnecessary downtime by investing time into a regular training program for all employees, both new and veteran workers. Successful programs should include operational training, as well as education on how to safely and effectively perform lockout tagout procedures before repair or maintenance. Training should be available to all affected and authorized employees for maximum safety and performance.

In your facility, work doesn’t stop. That’s why you need a company that can keep your operations running smoothly, both day and night. You need a partner that can help improve productivity and reduce downtime, so that you can focus on doing what you do best. M&M Sales & Equipment can audit your current processes and uncover opportunities that can not only help you do more for your customers, but run more efficiently and profitability as well.

Contact us by phone, visit our website or stop in one of our four locations to learn more.

How to Choose the Right Drill Bit for Your Application

Drill bits. One of the most useful and versatile tools that exist. You may be surprised to know that using the wrong one can not only hinder production, but could be costing more than you may think. That’s why it’s important to choose drill bits that are optimized for the application. Otherwise, you’re likely to be replacing the bits and the tools too often. Not only that, but you risk damaging the workpiece and having to start over.

Machinists and fabricators use drills daily, and proper drill bit selection can save both time and money. If you are looking to get the best machining result, here are some things to consider when choosing a drill bit for your next project.

Choosing the Right Drill Bit for the Job

Morse Cutting Tools – HSS

There are countless drill bits on the market today, making selection both difficult and time consuming. Two main categories of drill bits include standard bits used with handheld drills or drill presses and boring machine bits that are used in automated machinery like drill banks and CNC machines. Here are some brief explanations of various types of drill bits.

Twist Drill bits are the most common and can be used in a variety of everyday tasks from drilling woods, metal and plastic. They are made from High-Speed Steel or Carbon Steel.

Counterbore bits create a flat bottom blind hole with a smaller diameter center hole. These are often used to create a recess that can hide a fastener head.

Countersink bits create a tapered surface hole with a smaller center hole to allow fastener to sit flush with the material.

Flat Bottom Boring bits are similar to counterbores, but do not have a center drill.

Specialty bits are essentially all bits that don’t fit into the above categories and can be used with glass, tile or other specialty materials.

Coolant Through Drills have coolant ports that run through the drill and feed coolant to the cutting edge, allowing for faster cutting and improved chip evacuation. Used in high performance drilling operations.

Exchangeable Tip Drills have replaceable carbide heads or tips that saves time when changing tools and saves money over larger solid carbide drills. They also boost productivity in many machining applications.

Spade Drills have spade inserts that allow for cost effective drilling of deep holes and large diameter holes. They also run well on older machines and at lower speeds than high performance carbide drills.

Inserted Drills have multiple carbide inserts that handle the metal cutting. They are faster than HSS and cobalt drills, are cost effective and many can be used to “turn” the hole to a larger diameter than the drill size, much like using a boring bar in a lathe.

Understanding Drill Bit Materials

Drillco Drills

Certain tooling and machining operations require specialized drill bits that allow for effective drilling, without burning out too quickly.  Below, you’ll find some common drill bit materials and their uses.

Cobalt (HSCO): Despite being more brittle than HSS, cobalt drill bits are ideal for drilling harder steel as well as stainless steel grades. They are often more expensive than other drill bits but tend to last longer.

Carbide (Carb): Carbide is considered the hardest and most brittle drill bit material and can cut hardened steel, stainless steel and aluminum with ease. Ask if the CoroDrill 860 from Sandvik Coromant is right for you.

Diamond: These bits are effective for drilling tile, stone or other hard material and the use of water is recommended to prevent damage to the workpiece or tool. These are costly, so they are recommended for use in very specific tasks.

High-Speed Steel (HSS): High-Speed Steel bits are harder, more resistant to heat and can drill metal at greater cutting speeds than high-carbon steel. Ask about our HSS drills from Morse or Drillco that are available in a variety of lengths, including jobber and stub/screw.  

How Flute Design Impacts Cut

Flutes are grooves that are cut into the body of the drill bits to provide cutting surfaces, permit removal of chips and allow cutting fluids to reach cutting surfaces. There are different variations of flutes, but here are some common ones you should know.

Standard: Standard flutes are the most common and have a circular cross section.

Parabolic Design: This refers to the open geometry and faster spiral of a twist drill bit. It offers improved chip evacuation, increased feed rate, shorter cycle times and reduces the need for a peck cycle. It’s also less likely to jam and break.

Straight Flute: Used when drill rigidity is more important than chip evacuation, especially in short chipping materials. Also, can be used when the workpiece is spinning instead of the drill itself.

Source: CNC Cookbook

Drill Point Coatings Explained

Coatings reduce friction when drilling. That reduction of heat helps to protect the drill bit and improves the flow of material out of the hole. See below for a brief explanation of various drill point coatings.

Black Oxide is a black surface coating that improves heat resistance, reduces friction and increases chip flow.

Bronze Oxide coatings help to increase tempering and relieves stress on the bit.

Bright drill points do not have a coating, but they are polished for increased chip flow and can be used in plastics, woods and aluminum.

Titanium Nitride (TiN) coatings help drills run faster and increases tool life because it increases the hardness of the bit. Look for drill points to be gold in color.

Titanium Carbonitride (TiCN) is ideal for stainless steel, cast iron and aluminum as it is harder and more wear-resistant than other coatings. Look for drill points to be a blue-gray in color.

Titanium Aluminum Nitride (TiALN) is ideal for use in high-alloy carbon steels, nickel-based materials and titanium, but should not be used for drilling aluminum. Look for drill point color to be violet.

“Man must shape his tools lest they shape him.”

Choosing the wrong tools can impact your productivity and profitability. With so many options out there, choosing the right cutting tools can be overwhelming — but it doesn’t have to be. We take pride in the level of knowledge and experience the M&M Sales & Equipment team has to offer our customers.

If you’re looking to improve production in your facility, but don’t know where to start, give us a call or stop in at one of our four locations. We offer a variety of quality drills from top-rated brands like Drillco, Morse, Guhring and Sandvik Coromant. Whatever your production needs are, M&M Sales & Equipment can help you get it done. Contact us today.

SPI: Limited Time Offers! – through August 31, 2019

From July 1-August 31, 2019 SPI is offering limited-time pricing on:

SPI Promo - Limited Time Offers through August 31, 2019
  • CO-AX Centering Indicators
  • IP54 Digital Tire Tread Gage
  • 3 Speed 20″ Pedestal Fan
  • IP54 Digital Rotor Gage

Mention SUMMER PROMO when ordering. Offer expires 8/31/19.

Give us a call at your preferred branch location:

Download the SPI 2019 Limited Time Offers flyer now.

Contact us for more information.

U.S. and Texas Economic News Roundup

We think it’s important to stay up to speed on the news that impacts us all. It’s easy to get tied up in the daily grind and not notice what’s happening in the world around us. That’s why we check the headlines every day and when we come across interesting stories, we’ll share them with you. Plus, we want to hear from you. Feel free to drop a comment below.

We hope you’ll be able to leverage this economic and trend information to your advantage. Here’s a bit of what’s happening here in Texas and the U.S right now.

U.S. Cutting Tool Consumption

Earlier this month, the U.S. Cutting Tool Institute (USCTI) and AMT — The Association for Manufacturing Technology announced cutting tool consumption in the U.S. was up 1.3 percent in April, totaling $206.3 million. The number is down 1.9 percent from March’s numbers and includes data reported by companies that participate in the Cutting Tool Market Report. The report is a good representation of cutting tool consumption, and the analysis is a leading indicator of upturns and downturns in our manufacturing industry at home. There’s reason to believe the growth rate is slowing and reduced Boeing 737 production rates and unsettled trade agreements could be to blame. According to Mark Killion, Director of U.S Industries at Oxford Economics, although numbers are remaining above last year’s, new orders decreased in April. This aligns with slowing business investments and weakness in the motor vehicle sector.

Texas Employment Trends: Oil & Gas Trend Down

Employment is ramping up and unemployment falling in Texas. That’s pretty good news. According to recent data from the Federal Reserve Bank of Dallas, the Texas employment rate has seen an increase of 2.1 percent in May, following a 3.1 percent increase in April. And gains were pretty widespread in May, but manufacturing, hospitality, and oil and gas employment did fall, and shops are beginning to cut overtime. Texas lost four rigs, bringing total rig counts to 463. This may be why we are seeing some softening in the local economy. Interestingly, the information sector has been the only one to cut jobs this year. Employment gains were also spread throughout Texas’s major metro areas with the exception of San Antonio. Austin led the charge with 7 percent growth. 

Overall, unemployment numbers are down to a new record low of 3.5 percent in May, which aligns with the U.S. unemployment rate of 3.6 percent. Let’s hope those numbers hold on long term.

Texas Population Growth

Texas has some of the fastest growing cities in the United States. According to reports in late May from the United States Census Bureau, the largest population growth regions for the state include San Antonio (20,824), Fort Worth (19,552), Austin (12,504) and Frisco (10,884). Back in 2018, San Angelo surpassed the 100,000-population mark. Texas was also one of the four states that gained more than 50,000 housing units, with a whopping 172,000 new units added between 2017 and 2018. With population growth comes industry opportunity, and we’re seeing a surge here at home, as the Permian Basin has some of the best energy resources in the nation. While the outlook remains somewhat positive overall, it’s critical to remain cautious here at home as the economical terrain is starting to become a little rocky.

Energy Outlook

Pioneer Natural Resources is a company well known for drawing oil and gas from the Permian Basin using hydraulic fracturing. Back in 2014, it was projected that Pioneer could produce a million barrels per day by 2024. Today, Scott Sheffield, CEO of the company, says those numbers are doubtful due to their loss of investors. Investors know there are large amounts of gas in the shale formations; the question is how affordably can it be extracted. The company has already spent more than budgeted in order to meet that lofty goal and is in the midst of layoffs themselves.  We don’t have a crystal ball and can’t predict the future, but this certainly gives cause for concern of the future of fracking.

Texas Manufacturing Industry News

We happened upon some interesting news in The Texas Tribune. In April 2019, Senate Bill 649 passed the Senate and aims to increase the number of Texas plastic and paper manufacturers using recyclables as industrial feedstock to produce goods. It requires the Texas Commission on Environmental Quality and the Texas Economic Development and Tourism Office to increase demand for recyclable materials in the manufacturing industry. The bill won the endorsement of over 60 businesses, even the Texas Chemical Council. There have been talks about how to increase the use of recyclables in manufacturing; one idea is to place plants right at the source of the materials. This will obviously take more discussion and the plan will likely come from a third-party administrator. We’re interested to see how this pans out.

West Texas in the News

We pay close attention to state and national economic issues, but M&M Sales & Equipment has a soft spot for our hometown of Odessa. With abundant energy resources, infrastructure and a skilled workforce, Odessa is an ideal place for machinery, metal and chemical manufacturing facilities. Just recently, we read in the online publication Manufacturing.net that Facebook is planning a massive solar farm just north of Odessa. Called the Prospero Solar project, it will be Facebook’s first direct investment in renewable energy for its data centers and will have the capacity for 379 megawatts. You may be wondering why the social media giant is investing in solar. CEO Mark Zuckerberg says, “We set a goal for all our data centers and offices to use 100% renewable energy by 2020. These new solar projects will help us reach that goal.” Shell Energy North America and Facebook plan to share the power. As always, if you have questions and need expert advice on the cutting tools and supplies you need, just ask. M&M Sales & Equipment is here to help.

Introducing the New Left Hand Drill Kit from Drillco

Ever snap the head off of a bolt or screw? If you’ve ever had to remove a broken screw or back out part of a broken thread, you know that it can be rather difficult. You’ve probably tried the punch and hammer method, drilling and tapping or even tried an air hammer to do the job, but that may only work when it’s located in the perfect spot, and the moon and stars are aligned. Unfortunately, that’s not always the case. Every application is different, and it’s good to have options.

Some methods can leave you worse for wear, either by ruining the threads or mushrooming out the top of the fastener. That’s why many people find left hand drill bits to work better and faster than alternatives such as easy-outs that often snap off and leave a bigger problem behind. Why not use a regular drill bit? You’ve probably noticed that if you were to use a regular drill bit in a clockwise direction, you would actually tighten the screw in further and blunt the drill bit. You certainly don’t want that.

How does a left hand drill bit work?

A left hand drill bit is a useful tool when trying to remove a broken screw or a bolt that has had the head sheared off. It works by biting into the broken fastener and pulling the screw out of the hole. For faster removal, you can use a center drill puncher to make a center mark before you get started. It creates an indentation so you can drill where you actually want to drill.

The New Left Hand Drill Kit from DRILLCO removes broken bolts, screws and other fasteners without an extractor. In the market for a left hand drill kit? Check out these exclusive features:

  • Cobalt Steel Material for excellent heat and wear resistance
  • 135° Split Point reduces walking and engages fasteners more easily
  • Bronze Surface Treatment for maximum lubricity and acts as protective layer
  • 3-Flat Shank for less slippage in drill chuck
  • Lightweight, compact rollup pouch for storage
  • Kit contains 11 of the most frequently used sizes

Left hand drill bits can save you serious time and money. If you’re interested in improving your productivity and profitability, contact us today. The pros at M&M Sales & Equipment are happy to help you find solutions to all your metal cutting needs.

Sandvik Coromant Spotlight: Improve Your Machine Shop’s Burden Rate

Are you accurately assessing your operational costs? Many production facilities try to roll equipment costs and operating costs into one overhead account and then attempt to apply it to the entire shop. At a minimum, two problems can come from that:

  • You could dramatically underprice your rates for some parts and never be able to cover the cost of production.
  • You could overprice and drive business straight out of those departments.

If you don’t accurately assess the true costs associated with each machine or each part, you’ll never get a full return on your investment, and that’s when your business suffers.

Take a look at your production costs. What does it cost per hour to run your equipment? What is your output rate per part? Your scrap rate? If you think your shop could run faster, leaner and more efficient, you’re probably right. That’s exactly where M&M Sales & Equipment shines. Not only do we have extensive product knowledge, but our staff are among the few in the industry that have real metal cutting-application experience. We know the cutting tools and supplies you need because we’ve been in your shoes.

We specialize in helping you overcome production challenges. Our customers know that they can come to us with questions and we’ll work to find solutions. Check out this example of a customer who needed help optimizing their cutting process:

Recently, a customer contacted M&M Sales & Equipment for a better and faster cutting solution. They were fabricating the same part, but from two different materials. One was stainless steel and the other low carbon steel. Their challenge was making the same hole in the center of the bar and wanted to use one drill for both materials for faster production.

One of our knowledgeable representatives went out to the facility to observe the process and offered a solution. Not only that, they tested that solution and dialed it in for optimal performance.

That solution was the Sandvik Coromant CoroDrill ® 880.

Anyone can sell a product. It takes experience to sell a solution. That Sandvik Coromant CoroDrill 880 could cut both materials, but it didn’t end there. Not only could it effectively cut the stainless steel and the low carbon steel, it did so efficiently. The drill cut faster, more consistently and didn’t fail prematurely, which meant less downtime and more time savings.

When you look at your shop’s fixed cost of producing a part, so many dollars will be spent no matter how you slice it. That’s your labor and burden rate. The only way to produce that part at a lower cost is to produce it faster with less waste. We can help you spec out the right tools and supplies you need to process a part, minimize scrap and reduce wear on your machines, ultimately improving your burden and job completion rates.

If you’re looking to improve performance in your production facility or want to learn more about the top-rated tools we sell, contact us at any of our four M&M Sales & Equipment locations in West Texas today.

How Do I Choose the Right Saw Blade for My Project?

Every facility can improve productivity, profitability and safety with the proper tools. Cutting tools like saw blades are no different. Many of the saw blades on the market are manufactured with technology that allows them to cut faster and cleaner and stay sharper longer.

Yet, it’s not always cut and dry when it comes to choosing the best cutting tools for the job. Choosing the right cutting, forging or processing tools is important whether you’re a professional working in an industrial facility or you’re a weekend warrior taking on a home improvement project. Either way, we want to be sure you have the tools you need to get the job done well.

Next time you’re choosing a saw blade, ask yourself these simple questions:

What kind of saw will be used?

All saws, including band saws, circular saws, radial-arm saws, chop saws or compound miter saws require different types of saw blades. Using the wrong one can not only impede production, it can be downright dangerous and ruin your tool as well. No one wants to experience downtime when trying to complete a project. Having to stop to repair or replace your tools can cost you time and money.

What material will you be cutting?

Light-gauge steel, stainless steel, natural stone, concrete, ceramic tiles and various kinds of wood all require blades made from specific materials. Use the wrong saw blade material and you may as well be using a butter knife. Some of the most common saw blades for metalworking include Carbon Hard Back, Carbon Flex Back, Bi-Metal, Carbide Tipped and Grit Edge. We carry a huge selection of metal-cutting tools and supplies from industry leaders like LENOX, Starrett, Arntz, Fein and Evolution.

How often will the saw blade be used?

It’s just common sense that the more you use a saw blade, the quicker it will dull. Remember to regularly inspect your blades for wear. For daily cutting practices, implement an inspection schedule into your standard operating procedures. This is especially important in manufacturing facilities and plants when there are multiple shifts. For safety be sure to keep a changeout log handy, so that the next person to use the tool will know exactly when maintenance is required.

M&M Sales & Equipment recommends these preventative maintenance and safety tips:

  1. Always wear safety glasses, goggles or face shield.
  2. Clamp your workpiece to keep both hands on the cutting tool, if applicable.
  3. Clear blades of debris and replace blades regularly.
  4. Double-check and test parameter settings (speed and feed rate).
  5. Use guarding when appropriate.
  6. Check coolant levels.

Our partner Lenox offers a blade selector on their website to get you started. Access the Lenox Blade Selector here. We can help you select exactly the right cutting tools you need to work safely and effectively. Just contact us and a member of our staff will happily answer any questions you have. M&M Sales & Equipment is here with expert advice when you need it. Just stop in or call one of our four locations in Odessa, Lubbock, Amarillo and Ft. Worth.

Steady as it goes for Permian Basin rig counts

Steady as it Goes for Permian Basin Rig Counts

How Rig Counts Indicate Oil and Gas Economic Health

Since 1944, Baker Hughes has been supplying data on rotary rig counts to give insight into the economic health of our energy industry. Beginning in 1975, the company started providing monthly international rig counts, which offers a more in-depth look into the drilling industry. Baker Hughes Rig Counts has been consistent for more than 70 years and is considered a good measuring tool for demand. The active rig count is also a leading indicator of the number of products used in drilling, completing, producing and processing hydrocarbons (oil and gas).

Let’s look at the most recent summary count from April 2019:

We know that the oil industry is a never-ending cycle of highs and lows, and this latest report shows U.S. oil rig counts are a bit unsteady. According to an article published by Reuters, U.S. energy firms reduced the number of oil rigs operating to the lowest level in almost nine months.

Why the slowdown in oil drilling?

It may be due to independent exploration and production companies cutting spending to focus on earnings growth instead of simply upping output. It’s projected that crude prices will drop going further into 2019, so firms are bracing themselves for the change.

For the Permian basin however, numbers are holding steady compared with the rest of the country. The Permian Basin’s active rig count is staying steady at 459, down one from the prior week and up one from the prior year.

That’s good news for Texas and both the businesses and families impacted by the ebb and flow of the energy trade. We have a vested interest in the economic health of the industry, that’s why we thought we’d pass on this bit of information to our customers and friends. Be sure to stay up to date on the issues that matter to you by checking out our blog.

If you ever need help selecting the right cutting tools, abrasives or safety supplies, contact M&M Sales & Equipment. We’d be happy to help.