My favorite earnings call comment so far this year came from Jeff Miller, CEO of Halliburton, who kept getting questions from analysts about the 22% frac horsepower retirement comment he had made earlier in the earnings call.  Mr. Miller sounded like he wanted to put the topic to bed once and for all when he said:

“The 22% that we described is out of the market sold by the pound retired.”

We think HAL entered 2019 with about 4M HHP, so 22% is about 0.9M HHP, which means they exited 2019 with about 3.1M HHP.

Three months ago we looked at announced frac service company truck retirements and made the following observation:

“(Frac service companies) are retiring 50-60% of the trucks they had working in 2010.”

After the Halliburton comment we ran over to the filing cabinet to see how much horsepower HAL had in 2010:  1.9M.  

HAL just eliminated about 50% of the trucks they were running in 2010!

Back in November 2019 we looked at the 10M frac HHP available in 2010 and made this prediction for 2019:

“We think you will say goodbye to perhaps 5 million HHP over the next few months.”  

We also put that prediction in our “Hydraulic Fracturing Report” and it is weathering well.  We’re sticking with it.