Companies That Profit From Fracking

As fracking accelerates, look at HAL, CJ and SLCA.

Drillers have gotten very good at fracking. They have gotten so good, in fact, that they have flooded the market and pushed down prices.

Hydraulic fracturing involves pumping water, sand and chemicals under high pressure down a wellbore.  This fractures rocks underneath the surface so oil and gas can more freely flow out the of well. The process has been around since 1947.  Haliburton performed the first fracking operation in Kansas. However, it grew in importance (and notoriety) once drillers combined it with horizontal drilling to form a game-changing combination that has helped the U.S. unlock its vast shale resources.

Drillers have gotten so good at this process that they’ve unleashed a gusher of oil and gas production in recent years.  This has flooded the market and pushed down prices. Because of that, shale drilling activities have slowed.  And this hit fracking stocks hard. That said, those falling prices have fueled more demand for oil and gas.  That combined with tepid supply growth has started pushing prices higher. This rebound should drive up drilling activity levels in the coming year.  And that in turn should fuel higher profits for the companies that do the actual fracking.  Furthermore, it will likely take their stock prices with it.

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