Tag Archives: duc

Wells drilled but not completed fall below 8,000

The number of wells drilled but not completed (DUCs) fell to 7,950 in August 2019, the lowest level since November 2018. This is according to the latest Drilling Productivity Report from the Energy Information Administration (EIA). The report covers key onshore unconventional (shale) plays.

The number of DUCs has fallen by almost 300 since April 2019. In addition, the monthly 2019 numbers were also revised down by about 30-40 DUC’s from the numbers reported previously.

Completions were 1,389 in August 2019, a slight reduction from last month.

Interestingly Spears & Associates recently published a podcast ‘Mythical Beasts’ that cast doubt on the number of wells drilled but not completed. They point out flaws in the EIA methodology and have estimated that the number of DUCs is overstated by about 3,000. They conclude that there isn’t really a backlog of wells being held back by the E&P companies.

The EIA is projecting production of 8,768,000 barrels per day (bpd) for September. That’s up 87,000 on August’s number. For October, the projection is 8,842,000, up 74,000 bpd on September.

The September 2019 projection is 919,000 bpd higher than September 2018. That’s the first time in two years that the year-on-year increase is below 1 million bpd.

Wells drilled but not completed continue to fall

The number of wells drilled but not completed (DUCs) fell for the fourth month running. At the end of June, the total number of DUCS was 8,248, down 41 on the (slightly restated) prior month. This is according to the latest Drilling Productivity Report from the Energy Information Administration (EIA). The report covers key onshore unconventional (shale) plays.



Interestingly, the peak number of DUCs, which occurred in February, has been revised down by over 100 from last month (from 8,416 to 8,313).

After falling last month, completions rose by four to 1,383, though last month’s number was revised down by 16.

The EIA is projecting production of 8,496,000 barrels per day (bpd) for July. That’s up 61,000 on June. For August, the projection is 8,546,000. Although production number for June is up 1.25 million bpd year-over-year, the growth is slowing down dramatically. In 2018, the average monthly growth over the previous month was 135,000 bpd.  So far this year it is 41,000 bpd.

While May & June reported production numbers are similar to the report last month, there were downward revisions for January (53,000), February (88,000) and March (72,000).

For context, overall US oil production was 12.2 million bpd in April 2019, the first time it has exceed 12 million bpd. This includes nearly 2 million barrels from the Federal waters of the Gulf of Mexico, as well as other conventional areas such as California (451k) and Alaska (475k). The Gulf of Mexico is up 400,000 bpd on April 2018.

https://www.eia.gov/petroleum/drilling/

 

 

Wells drilled not completed keep on rising

The number of wells drilled but not completed (DUC’s) rose for the 21st successive month, according to the latest report from The Energy Information Authority (EIA).

At the end of August, the total for the 7 major onshore producing areas in the lower 48 states was 8,269. This was up 238 on the restated figure from the previous month. The DUC’s in the Permian basin now stand at 3,630. This is up 211 on the previous month and up 80% year-on-year. DUC’s in the Eagle Ford are now 1,545 and have risen 25% year-on-year.

Note that, every month, the EIA restate prior months’ figures, with revisions going back four years. 

Completions are still slowly rising and were 1,282 in August. Completions in the Permian Basin peaked in March 2018. The Anadarko Basin of Oklahoma shows the fastest rise in completions.

Increases in production from these basins is projected to slow. Production rose by 106,000 barrels a day in August with the EIA projecting increases of 93,000 barrels a day for September and 78,000 barrels for October.

https://www.eia.gov/petroleum/drilling/

Wells drilled but not completed rise again in November

The Energy Information Authority (EIA) released its latest Drilling Productivity Report that showed the number of wells drilled but not completed (DUC’s) rose for the 12th successive month.

At the end of November, the total for the 7 major onshore producing areas in the lower 48 states was 7,354, up 94 on the previous month. The total is 1,900 more than December 2016. DUC’s in the Permian Basin have now doubled since the end of last year (from 1,281 to 2,613).

Wells drilled dropped for the 3rd successive month, while completions rose slightly to 1,086, up 66% on completions in December 2016.

The DUC’s will remain high for some time due to a shortage of equipment and personnel. Evidence of this came last week when Keane Group announced they had placed orders for three additional frac fleets (50,000 hydraulic horsepower each) for a total cost of $115 million. Two of the units will be delivered by the end of the second quarter of 2018 and the third by the end of the third quarter.

Keane’s capital expenditure works out to about $770 per hydraulic horsepower. That shows that capital costs are rising rapidly for pressure pumping equipment and are approaching cost levels last seen in 2014. Mammoth Energy Services disclosed in its recent 10-Q that it expects to spend $64 million in 2017 to add 132,500 horsepower of new frac pumps and equipment. That works out at $483 per hydraulic horsepower. The company also stated that, historically, frac fleets cost $1,000 per hydraulic horsepower.