NCS Multistage sees increase in drilling activity amid COVID-19 recovery
Mar 7th 2023, 10:15 pm
PART 1: Performance Analysis NCS Multistage Holdings, Inc. reported an increase in drilling and completion activity in North America as the global economy and oil and natural gas demand recovered from the impact of the COVID-19 pandemic. The Canadian rig count surpassed comparable 2019 levels in the third quarter of 2021, with customer activity continuing to increase in 2022. However, activity in the United States in 2023 may be lower than levels reached in the fourth quarter of 2022, reflecting rapid reductions in natural gas pricing in late 2022 and early 2023. The company continues to face intense competitive pressure across all product and services offerings, which may negatively impact its market share, operating margins, and rise in prices. Despite the recent and expected improvements in industry activity levels, the company must monitor these competitive pressures, maintain high-quality products, and prices reasonably to remain competitive. PART 2: Forward-Looking Analysis The industry outlook remains positive for NCS Multistage Holdings, Inc. as the global economy continues to recover from the impact of COVID-19. While the uncertainty of natural gas pricing could impact activity levels in the United States, the outlook for drilling and completion activity for 2023 is expected to be equal to, or higher by up to 10%, than 2022 levels. The company's competitive position is expected to remain intense, with competitors vying for market share, negatively impacting the company's margins, and rise in prices. This should lead to an increase in the company's market share as it increases customer prices following higher raw material and component costs. Overall, the company must continue to monitor both the industry and competitors while maintaining high standards for its products and services. The CEO and management firmly believe that their products and services will remain highly attractive in the industry, considering their precise placement and pinpoint stimulation technology, even in the competitive atmosphere. With these factors in mind, NCS Multistage Holdings, Inc. is poised to continue providing high-quality products and services, supporting the industry's growth and development over the next year.