The number of Wells drilled but not completed (DUCs) fell for the third month running. At the end of April, the total number of DUCs was 8,283, down 118 on the restated prior month. That means that the total has dropped by 293 from its peak. This is according to the latest Drilling Productivity Report from the Energy Information Administration (EIA).
More worryingly, completions also fell for the first time in 5 months, down 16 to 1,395. If that trend continues, the onshore shale plays are going to struggle to increase production. Unconventional wells have a high decline rate, especially in the first year. There was a big spurt of production in the year to September 2018 US (year-on-year growth was 1.9 m bpd). There has to be lots of new wells completed merely to replace the decline. Given the low oil price and the lack of access to capital markets, it’s hard to see that happening.
Note that, every month, the EIA restate prior months’ figures, with revisions going back up to 4 years.
Production growth stalling
The EIA is projecting production of 8,450,000 for June, up 85,000 bpd on May. However, the numbers for May & June are both down by about 50,000 on the forecast last month.
March & April’s actual production was also revised down by 45,000 bpd each, continuing a recent trend of downward revisions to previous months. May’s production is only up 100,000 bpd on December’s figure.
Overall oil production in the Anardarko Basin is forecast to keep falling fall as declines from legacy wells are greater than the production from new wells. Read this article from Reuters about investor interest dimming in the Anadarko Basin.
Last month the EIA forecast that production from the Eagle Ford would fall in June. They are now forecasting flat production in June, followed by a fall in July.