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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.

Guhring SelectMill

New Product: Guhring SelectMill for Optimal Price and Efficiency

Guhring is a world-class manufacturer of drills, end mills, taps, tool holders and other innovative cutting tools and has been for over 100 years. Since they began production of tools in their Wisconsin facility in 1982, they’ve been busy bringing industry-leading Guhring technology here to the United States.

Another interesting fact is that they actually produce their own carbide rod as the substrate material for all of their carbide end mills. That attention to detail and commitment to quality is why we believe so strongly in their product lineup and wanted to share their latest product release with you. 

Introducing the new SelectMill German-made carbide end mill from Guhring

SelectMill is a new program of German-made carbide end mills ideal for the customer looking for a high-quality and low-cost option. These universal end mills are designed to excel in a wide range of materials and are crafted for shops with shorter production runs or who are machining different materials on a day-to-day basis.

Their competitive price tag comes from years of expertise manufacturing high-performance tooling. The result is a streamlined manufacturing process that delivers maximum performance at a reasonable cost.

The SelectMill offering includes:

  • 2, 3, and 4-flute general purpose tools in “standard” and “long” lengths, with FIREX heat-resistant coating
  • A series of 3-flute aluminum end mills that extends the range of materials possible to machine with SelectMill
  • For roughing operations, SelectMill offers a roughing end mill with a fine-tooth knuckle profile, and 3-4 flutes depending on diameter
  • High performance 4-flute variable helix end mill completes the SelectMill offering

M&M Sales and Equipment is committed to being your go-to source for all your cutting tools, abrasives, safety supplies and more. If you’d like to learn more about the Guhring line of end mills or just have questions, contact M&M Sales and Equipment today.

Learn more about Guhring’s SelectMill Program.

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Oil and the State of Small Business

    As oil prices struggle to climb above $50/barrel and price stability seems to be anything but a reality, how do we plan for success in the current economic environment? The article below, published on FoxBusiness.com points to optimism in the market due to the lowering of crude inventories and the expectation that OPEC will extend their production cuts through the end of the year. But, is optimism enough to keep a business afloat? After 2 years of being hammered by poor oil production and now going into a third year of marginal growth now is the time to step back from your business, take the 20,000 ft. view and decide what you need to do to become or stay profitable! If you have already done this, great!! you are ahead of the pack. If you are sitting around waiting for the economy to right itself I’ve got 3 quick “projects” that you can tackle to start being proactive instead of reactive in your business.

 

  1. Read “Simple Numbers, Straight Talk, Big Profits” by Greg Crabtree. If you are new to P&L statements or business finance this short, easy to read book will get you up to speed quickly so you can make decisions on facts and your gut instead of your gut alone. (I’ll give a copy of this book to the first 2 people who comment asking for a copy.)
  2. Set SMART (Specific, Measurable, Achievable, Relevant, Time Bound) goals and keep them in front of you daily!!
  3. Find one or two KPI’s(Key Performance Indicator) and start measuring your performance. I would highly suggest using Revenue per Full Time Equivalent or Labor ROI as one of your indicators if you have more than a couple employees.

I’ve pasted the FoxBusiness article below. It’s a pretty interesting read as well. Reach out and let me know what you think of the article or anything in this post.

Oil Gains on More Support for OPEC Cuts, Optimism About U.S. Crude Draw

Markets Reuters

Oil prices rose for a second day on Thursday, closing more than 1 percent higher as support grew for OPEC output cuts a day after the U.S. government reported a big draw in crude inventories, boosting confidence that a global glut might diminish.

On Wednesday, the U.S. Energy Department reported that U.S. crude stockpiles posted their biggest weekly drawdown since December as imports dropped sharply. Inventories of refined products also fell.

“People are hinging the optimism today on the recent drawdown in inventories and I think that might last as long as we don’t have another inventory build,” said Stewart Glickman, head of energy research at CFRA Research in New York.

In recent days major producers like Iraq, Algeria and Kuwait have voiced support for extending last year’s deal from the Organization of the Petroleum Exporting Countries and other producers to cut supply by almost 1.8 million barrels per day (bpd).

On Thursday, non-members Turkmenistan and Equatorial Guinea said they would also join the cuts, though they are smaller producers.

On May 25, OPEC will meet to determine policy for the second half of 2017. Most analysts expect the group to extend cuts until at least year-end. If they don’t, Glickman said, “they’ll take the floor out from oil prices.”

OPEC said Thursday that group production fell in April. Despite the reduction, there are few signs that supply has fallen significantly as other producers have continued to supply key customers, especially in Asia.

OPEC also said it sees more supply coming from non-member countries such as the United States. The cartel raised its estimate of total oil supply growth from non-OPEC producers this year to 950,000 bpd from a previous forecast of 580,000 bpd.

U.S. oil production <C-OUT-T-EIA> rose to more than 9.3 million bpd last week, highest since August 2015. Even with this week’s drawdown in U.S. crude stocks, Glickman said the country has a way to go to reduce oversupply.

“You’re going to have to have a few weeks of 5 million-barrel draws just to get back to square one,” he said.