Tag Archives: EIA

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 sharply

Allan D. Hasty

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 19th successive month.

At the end of June, the total for the 7 major onshore producing areas in the lower 48 states was 7,943, up 193 on the restated figure from the previous month. The DUC’s in the Permian basin now stand at 3,368, up 164 on the previous month. DUC’s in the Eagle Ford have now risen for 12 months in a row, the other basins have been flat or declining.

Interestingly in previous monthly reports of the EIA, it appeared that the rise in DUC’s was leveling off. The EIA has reduced previously reported totals by an average of 270 for each month in the past year, so the graph now shows that DUC’s are still rising at a solid pace.

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

Surprisingly completions actually fell by 1 to 1,243, though the Permian increased slightly. May’s overall completion figure was also revised down by 41 and, in fact, the EIA revised down each month since December 2017 by an average of 53 completions.

Production from these basins rose by 126,000 barrels a day in June, with the EIA projecting increases of 140,000 barrels a day for July and 143,000 barrels for August.

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

Wells drilled but not completed keep rising

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 17th successive month. However the rate of increase appears to be slowing

At the end of April, the total for the 7 major onshore producing areas in the lower 48 states was 7,677, up 55 on the restated figure from the previous month (but down 15 from the number published last month!).  The DUC’s in the Permian basin now stand at 3,086. DUC’s in the Eagle Ford have now risen for 10 months in a row, the other basins have been flat or declining.

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

Completions rose by 41 to 1,242, the highest since March 2015 and are up 33% on a year ago.

Production from these basins rose by 126,000 barrels a day in April, with the EIA projecting increases of 133,000 barrels a day for May and 145,000 barrels for June.

 

DUC’s continue to rise

The Energy Information Authority (EIA) released its monthly Drilling Productivity Report and it showed that the total number of wells drilled but uncompleted (DUC’s) continues to rise.

For July, that total now reached over 7,000 wells for the 7 major onshore producing areas in the lower 48 states. That total has risen by an average of 210 a month in the year to date. However of the increase of almost 1,500 YTD, over 900 are in the Permian basin alone.

There is always a lag of at least 2-3 months between drilling a well and completing it for production. As the chart above illustrates, even throughout 2014, when oil was over $100 a barrel, DUC’s were around 4,000-4,500. As oil prices dropped, a few of the financially stronger E&P companies opted to leave the oil in the ground and wait for higher prices rather than complete and sell their oil when prices were depressed. Many more had to keep the production flowing as they needed the cash flow

The backlog is growing primarily because of a shortage of frac crews in the Permian Basin. On their recent earnings call, Halliburton, the market leader, stated that their frac crews were fully booked for Q3. Following closely behind is that frac fleets are just about fully utilized. Most of the major pressure pumping players have said they have no plans to add capacity as prices need to rise more to justify spending $20 million on a new frac spread.

In theory, the backlog of DUC’s represents an untapped source that could cause production to surge. In practice it is going to take a least a year before the DUC inventory returns to more normal levels, so it won’t be a surge, more of a gradual increase.

Note also that in July, completions topped 1,000 for the first time since August 2015, but they are still a long way off from the peak of nearly 2,000 achieved in October 2014. And while, new wells are more productive than before, so we don’t need to achieve that level of completions it’s also fair to say that the oilfield service suppliers don’t have that capacity anymore either.

Expect to see E&P companies reduce rig count in the latter part of 2017 while they begin to work down their DUC inventory. The CEO of Keane Energy Group said on the company’s recent earnings call that he wouldn’t be surprised if the rig count dropped by 200.

EIA Drilling Productivity Report – Aug 2017