I joined the geophysics industry in 1992 and this decent from the 2013-14 "high" has been similar I suspect to the "flat period" when I was hired on.
It was a good 8-10 years with oil prices below US$40 where we bumbled along with good years and bad, and companies coming in and out of debt crises; the actual "fall off the cliff" was in 1984 or 1985; the company that hired me on (Digicon) was not long out of Chapter 11. Between 1992 and 2000 with different firms I saw 3 redundancy rounds driven by lack of cashflow (ie over investment in assets that did not pay off)
2004-2014 gave us a geophysics industry in growth; bigger and better tech, ever more people, growth in the land and marine fleets and ever bigger and better conferences. You could see the party winding down in 2012 as investment was shifting to the growing US unconventional production.
The first warning flag for me was attending NAPE in Houston in 2010 or 11 and seeing only two or three exhibitors showing conventional plays supported by attribute or AVO work. The rest were all hydraulically fractured shale plays; the geophysics trade stands were idle,and there were landmen everywhere you looked, trying to see the next big thing.
It was the EAGE in Copenhagen 2012 (on the back of the CSEG show) that was the second big red flag that the money had shifted from conventional to unconventional. That was when Fugro announced selling off the oil and gas side (FSI) to CGG, and Paradigm was also sold. Two billion plus dollar deals should have suggested that the music was slowing down but most people were still upbeat. I was already seeing cashflow issues for some companies and more pressure on prices than before - but everyone was talking up the data library business. Big vessels still being built and launched.
At a point you can track the growth of the data libraries until the asset values held by the major companies exceeded the total industry spend on seismic data. The industry ran up a big "buffer" as it had done with smaller "busts" with the idea that when prices spiked again they could recoup those losses and not write off the investment in depreciation. This has a lifespan of maybe 2-4 years, unless you make drastic cuts as well.
Only TGS did this; they slashed everything apart from their data library "core" very quickly, and used cheap vessel time from third parties to build their data library. They alone of all the big companies kept in profit throughout.
Cutting back is always harder than growing. Companies hung on telling themselves that the shale debt mountain would collapse,or there would be an economic boom and serge in demand. Eventually you have CGG and Schulmberger throwing in the towel on acquisition entirely, and trying to follow TGS' model maybe 5 years later.
But the same basic problem was there - too much supply- of processed data library, acquisition capability and especially processing capability. The world had shifted to looking at lower risk, larger plays which meant if you needed hyper-specialised complex acquisition and processing to try and image the oilfield, the complexity and cost were probably too high to drill at $30-$50 oil prices.
And too much supply of oil; the unconventional shale oil fields can respond to a demand (price) spike much much quicker than a conventional exploration programme. Until that's out of the way, it's hard yards for conventional exploration.
So -maybe like the post 1984/5 crash we actually have 15-17 years "fallow" before the demand starts to rise; that might make it 2030 or so from the 2015 crash. That kind of gap makes sense (as it it did from 1985) as you have to ride down the depletion curves from all of the fields that were found in the boom,and allows for paradigm shifts in technology that are game changers. In 1985-2000 we saw the rise of 3D, AVO, pre-stack migration (time and depth), massive multi-streamer acquisition, land nodal technology and linux clusters, all of which fed the boom.
We'll see drones, automation, machine learning and autonomous marine vessels come into their own for sure in the next 10 years; nothing like hard times to get the technology and innovation juices flowing. Oh and Space-X's Starlink could shift things too.
Of course, over that period we will seem demand start to fall as ICE cars get replaced in the global fleet in more significant numbers.
The flip side is US shale production; that's grown like a rocket, but fast growth usually means fast decline. if the money goes out of shale as quickly as it went in, then you might see an upcycle in a shorter period - maybe 2023-4? Still I think it will be a while before we see seismic vessels coming out of "cold stack"
And that is I'd suggest the main indicator; it costs millions to take a vessel out of cold stack so you'd be pretty sure that there is money to support it before doing that. And a demand for large-scale seismic acquisition that exceeds the current seismic fleet capacity is the "point of the spear" - the other work all flows from that.
Oil prices - note the boom/bust cycles: https://www.macrotrends.net/1369/crude- ... tory-chart
Shale Profile blogs - look at the production trends, and the sensitivity to oil price variations : https://shaleprofile.com/blog/us-monthl ... uary-2020/
Just my predictions of course, but the take home might be:
- very hard for a meaningful geophysics recovery in oil and gas until US shale oil plays are out of favour
- watch where the investment money is going, especially from the majors
- recovery will be technology and automation driven, so might mean higher skill/qualification needed for entry to jobs
Good luck people!