Use New Well License to Reduce Exposure

Why is it important to watch new well license with you important customers.  Peyto announced it would slash its capital budget to between $200 million and $250 million, from a preliminary estimate of $300 million to $450 million. The image below shows a huge drop in new well license count in July but drilling is not impacted until now. We know that Peyto Average drilling costs of $1.8 million/well and completion costs of $0.9 million/well the drop in new well license is 10 new wells a month that is $200M per year. If you are a major supplier to Peyto that is a major exposure to your 2018 revenue. It would be nice to have this info in July and not December.