Tag Archives: DUCs

Shale well completions fall sharply in December

The number of wells drilled but not completed (DUCs) fell to 7,573 in December 2019, the lowest level since October 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 900 since May 2019.

More significantly completions fell sharply to 1,086 in December 2019, down 320 from the peak in the summer. Some of the downturn is due to E&P operators being under pressure to be cash-flow positive in 2019, so I would expect some modest rebound in Q1 2020. However, the likes of Halliburton and Schlumberger have announced significant reductions in pressure pumping capacity. That suggests a significant rise in completions is unlikely any time soon.

Note that, in August 2019, Spears & Associates published a podcast (EP125) ‘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 9,178,000 barrels per day (bpd) for January. That’s up 33,000 on December’s number. For February, the projected rise is even lower (22,000 bpd). This suggests oil production from the unconventional shale plays is about to stall out.

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

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.

Onshore US production revised upwards while DUCs fall

The number of wells drilled but not completed (DUCs) fell for the fifth month running. At the end of July, the total number of DUCS was 8,108, down 100 on the revised 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.



The DUCs for previous months going back to December were revised downwards by about 30 a month.

The peak number of DUCs, which occurred in February, has been revised down by a further 27 from last month (from 8,416 originally reported to 8,313 last month to 8,286 now).

Completions rose by 19 to 1,411.

The EIA is projecting production of 8,683,000 barrels per day (bpd) for August. That’s up 63,000 on July. For September, the projection is 8,768,000.

This month, the EIA revised previously reported months upwards. March through June were adjusted by an average of 115,000 bpd. That reverses the trend of downward revisions in recent months.

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

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/

 

 

Warning signs for US oil production as completions drop

Allan D. Hasty

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).



Completions fall

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.

Anadarko falling

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.

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

Wells drilled but not completed fall for the second month running

Allan D. Hasty

The number of Wells drilled but not completed (DUCs) fell for the second month running. At the end of April, the total number of DUCs was 8,390, down 43 on the restated prior month. Last month’s number was revised down by 67 DUCs from what was originally reported. This is according to the latest Drilling Productivity Report from the Energy Information Administration (EIA).

Note that, every month, the EIA restate prior months’ figures, with revisions going back up to 4 years. 

The EIA is projecting production of 8,411,000 for May, up 82,000 bpd on April. This is down 49,000 bpd on the forecast for May from last month.  They are projecting 8,494,000 bpd for June, up 83,000 bpd on May.



Last month’s report contained a big surprise in that the EIA restated oil production for the first quarter downwards by an avearge of 190,000 bpd a month. This month’s report revises down January-April production further by an average of 60,000 bpd.

For the third month running, overall oil production in the Anardarko Basin is forecast to fall as declines from legacy wells are greater than the production from new wells. Production from the Eagle Ford is forecast to decline slightly in June as well.

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

Wells drilled but not completed fall for the first time in a year

Allan D. Hasty

The number of Wells drilled but not completed (DUCs) fell for the first time in a year. At the end of March, the total number of DUCs was 8,500, down 4 on the restated prior month. Last month’s number was revised down by 72 DUCs from what was originally reported. This is according to the latest Drilling Productivity Report from the Energy Information Administration (EIA).



The number of completions in the 7 major onshore producing areas rose by 65 to 1,392, the highest since January 2015. The Permian Basin accounted for most of this, though all regions posted increases.

Note that, every month, the EIA restate prior months’ figures, with revisions going back up to 4 years. 

The EIA is projecting production of 8,379,000 for April, up 88,000 bpd on March. The big surprise in the report is that the EIA restated oil production for the first quarter. January was revised downwards by 145,000 bpd, February by 214,000 bpd and March by 218,000 bpd. They are projecting 8,460,000 bpd for May, up 80,000 bpd on April.

The other point of interest in the report is that, for the second month running, overall oil production in the Anardarko Basin fell as declines from legacy wells were greater than the production from new wells. The Anardarko Basin is supposedly the hottest play outside the Permian, but these results don’t show that.

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

Shale completions surge to highest level in nearly 4 years

Allan D. Hasty

The number of completions in the 7 major onshore producing areas rose by 113 to 1,325, the highest since March 2015. The Permian Basin accounted for most of this, though all regions posted increases. This is according to the latest Drilling Productivity Report from the Energy Information Administration (EIA).

The number of Wells drilled but not completed (DUCs) rose by the lowest increase in 9 months. At the end of February, the total number of DUCs was 8,576, up 93 on the restated prior month. Last month’s number was revised down by 315 DUCs from what was originally reported. Most of the revision was in the Permian Basin.

Note that, every month, the EIA restate prior months’ figures, with revisions going back up to 4 years. 

The EIA is projecting production of 8,508,000 bpd for March, up 94,000 bpd on February. That’s also up 100,000 on what they projected last month for March. They are projecting 8,593,000 bpd for April.

In last month’s report, the EIA made headlines when it projected that the Permian Basin would pass 4 million bpd in March for the first time. Surprise! The EIA has revised its numbers and the Permian actually passed that milestone in January!

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

Wells drilled but not completed approaching 9,000

Allan D. Hasty

The number of Wells drilled but not completed (DUCs) rose by more than 200 for the fourth month running. At the end of January, the total number of DUCs for the 7 major onshore producing areas in the lower 48 states was 8,798, up 207 on the prior month. This increase all occurred in the Permian Basin.

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

The number of completions rebounded to 1,246, the highest since August 2018, as E&P companies started the year with replenished (if somewhat reduced) budgets.

The EIA is projecting production of 8,312,000 bpd for February, up 89,000 bpd on January. They are projecting 8,400,000 bpd for March, up 84,000 on the February projection.

Last month, after the big dip in completions in December, the EIA scaled back the growth in oil production for January and February. I speculated at the time that the EIA were being too pessimistic and so it has been proved. January’s production estimate is 57,000 bpd higher than previously forecast and February’s projection has been revised upwards by 133,000 bpd.

Many US land E&P companies have now announced 2019 capex plans with most stating that spending will be between 10% and 20% lower than 2018 levels. Despite that, most plan to increase year-on-year oil production by about 20%.

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

 

Onshore completions declined sharply in December

Allan D. Hasty

The number of completions declined sharply in December as E&P companies responded to the abrupt decline in the price of oil in late 2018. This is according to the latest Drilling Productivity Report from The Energy Information Authority (EIA).

Completions were 1,211, down 88 on the restated figure from the prior month. This is also down 96 on the original reported number. Completions were down in all regions except Appalachia.

The number of Wells drilled but not completed (DUCs) continue to rise, though revisions to prior months muddy the waters. At the end of December, the total number of DUCs for the 7 major onshore producing areas in the lower 48 states was 8,594. This is actually 129 down on the number reported last month but up 218 on the restated number. The average monthly increase for the last nine months has been 187.

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

The reduced completions has led the EIA to reduce the projected increase in oil production. Last month they projected production of 8,166,000 bpd for January. Now they are projecting 8,116,000 bpd. February is forecast to increase by only 63,000 bpd on January.

I wonder if the EIA is being a little too pessimistic in the short-term. Both Halliburton and Schlumberger have announced Q4 results in recent days and both stated that they expected completion activity to be up slightly in Q1 from Q4 as E&P customers suffered from budget exhaustion in late 2018.

However, in the long-run, unless oil prices rise substantially, the onshore shale plays will struggle to match the torrid grow seen in 2017 and 2018.

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