2020年北美石油服务与设备行业展望：2020年又是“少花钱多办事”的一年

J. P Morgan2020 North America Outlook2020 Another Year of “Do More With Less”； Seasonal "Hope Trade"

NorthAmericaEquityResearch 20December2019 J.PMorgan 2020NorthAmericaOutlook 2020AnotherYearof“DoMoreWithLess”Seasonal"Hope ； Trade"ComesEarlyThisYear OilServicesandEquipment Wearehighlightinganexcerptfromour 2020Outlook:YouCanOnlyReapWhatYouSow;Cash th AC reportpublishedDecember13. HarvestingCycletoSortthefromtheChaff VWz-" SeanCMeakim,CFA (1-212)622-6684 ● PrelimU.S.E&Pbudgetssuggestlow-to-middouble-digitcapexdeclinein2020. Whilewe sean.meakim@jpmorgan.com expectbulkoftheU.S.E&Pstoannounce2020budgetsduring4Q19earnings,our E&P Bloomberg JPMAMEAKIM<GO> Danyel J.P.MorganSecuritiesLLC following3Qearningssuggestsa-12%declineiny/yspendingtobe BudgetTracke 】 JDesa (91-22)6157-3301 〜〜 accompaniedbya2%growthinproductionbasedon25%ofnamesoffering danyel.j.desa@jpmchase.comJ.P. preliminaryguidance.AnecdotalmessagingfromE&Psemphasizing"valueover MorganIndiaPrivateLimited , volumes,hasbecomeincreasinglyhomogenous,withseveralpreparedtodialback AndrewPHerring,CFA spendingandmaintainflattishproductionprofilesy/yinlessfavorablecommodity (1-212)622-8585 priceenvironmentinordertogeneratebettercashflow.Giventhat2019capitalbudgets andrew.p.herring@jpmorgan.comJ.P. havebeenconsistentlyguideddownthroughtheyear(down150-200bpsv.whenthey Corey MorganSecuritiesLLC wereannouncedearlierthisyear)owingtoanefficiency-inducedfavorableservice Mergenthaler,CFA (1-212) costenvironmentandE&Pcapitalausterity,wethinka-10-15%basecasereductionin 622-1167 2020spendisareasonablebogey.Whiletherolloverinshaleproductivityappearstobe corey.mergenthaler@jpmchase.com stilloutintheether,expectationsofarolloverin J.P.MorganSecuritiesLLC U.S.productioncouldbeenoughforahopetradeinearly2020,inourview. ● Pressurepumping:moreattritionneededbeforethemarketcanbalance. Inourview,NAM fracepitomizestoday's"cycleofabundance^^.Industrycapacitywasbuiltupconsiderably overthecourseofthepastcycle,fueledbyvoraciousdemandgrowthinshaleandlowbarriers toentry.Today,withaveragefracoperationsfarmoreefficientthanin2014(stages/day+40%) andE&Pgrowthinitiativeswaning,manypressurepumpingprovidersarenowsaddledwith equipmentthatlikelywillneverseeawellsiteagain.Assuch,manypressurepumperschose toretirefleetsin3Q19,suchasPTENandFTSIeachannouncing300khpreductionsin nameplatecapacity.Alltoldweestimateover2mmhpexitedthemarketsofarin2019. However,withpricingfallingandsomecontractorsoperatingatEBITDAbreakeven(or worse)levels,webelievestillmorehpneedstobecutupbeforeasemblanceofmarket balancecanberestored.Thiswilltaketimethough,aspumpersworkthroughsparepartsof idledequipment,andmaynotcomeuntillatein2020orevenbeyond. Figure1:FracDemand(LHS,mmhp)andUtilization(RHS) Figure2:EV/ReplacementValue 201120122013201420152016201720182019e2020e2021e CFWFTSINEXLBRTPTENPUMPRESTCW HPDemand(mmhp)MarketableUtilizationNameplateUtilization Source:Companyreports,J.P.Morganestimates.*CJ,FTSI,RESbasedon Source:Rystad,J.P.MorganEstimates. BBGconsensus. Seepage29foranalystcertificationandimportantdisclosures,includingnon-USanalyst disclosures. J.P.Morgandoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult, investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthis report.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision. www.jpmorganmarkets.com