Texas completions down

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cmm3rd
Posts: 420
Joined: Tue Jan 08, 2013 4:44 pm

Texas completions down

Post by cmm3rd »

From IV mb:

Texas completions for July down 33% yoy

https://www.rrc.state.tx.us/media/53564/july-2019.pdf

Month 2019 Oil Completions 2018 Oil Completions Change (YOY) Change (YOY) %
July 499 753 (254) -33.73%
June 632 914 (282) -30.85%
May 735 739 (4) -0.54%
April 593 616 (23) -3.73%
March 493 656 (163) -24.85%
February 584 672 (88) -13.10%
January 742 739 3 0.41%
Total 4,278 5,089 (811) -15.94%
dave_n
Posts: 92
Joined: Thu Aug 09, 2018 4:08 pm

Re: Texas completions down

Post by dave_n »

I used to hold rig count as an indicator of oil production; however, production efficiency has improved so dramatically it no longer seems to hold the same correlation.

While oil rigs have come down as outlined (and for that matter completions), production has gone up dramatically. See link below.

http://www.energyeconomist.com/a6257783 ... ivity.html
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: Texas completions down

Post by dan_s »

You are right, but well productivity gains are slowing from more than 30% annual productivity gains from 2010 to 2015 to 15% in 2018.

Raymond James forecasts assume 10% productivity gains in 2019 and another 5% in 2020.

Upstream companies are reporting:
> Increasing gas / oil ratios
> Parent / child well problems lowering oil recovery per acre
> Running out of Tier 1 leasehold
> Lateral length and proppant limits.

The other problem is a significant annual increase in the U.S. oil production decline rate.
Dan Steffens
Energy Prospectus Group
cmm3rd
Posts: 420
Joined: Tue Jan 08, 2013 4:44 pm

Re: Texas completions down (different numbers)

Post by cmm3rd »

Figures provided in first post in this thread were just oil wells. Below article has different figures, apparently for both oil and gas wells. Texas completions and permits were down 12% and 14%, respectively, through July y/o/y, according to this article. Permian DUCs added 9 in July, but nationally DUCs were down by about 100.

Texas well completions drop 12% through July

(Reuters) - The number of oil and gas wells in Texas readied for production fell nearly 12% in the first seven months of 2019 compared with the same time last, according to data from the state energy regulator, as activity dropped on concerns of slowing demand and oversupply.

Producers completed 5,749 wells in Texas from January to July versus 6,514 in the same period last year, the Railroad Commission of Texas said on Friday. Completion means the wells are ready to start producing.

Permits to drill new wells in the largest U.S. oil-producing state also declined this year, falling by about 14% to 7,166 in the first seven months of the year from 8,330 last year.

The declines have hurt companies that provide hydraulic fracturing and other services to energy producers. Many pressure pumping firms raced to build or acquire new equipment in recent years on hopes that producers would begin working through a build-up of drilled-but-uncompleted (DUC) wells.

Shares of pressure pumper Liberty Oilfield Services this week fell to a record low of $10.96, less than half its peak of $23.90 in May 2018. Rival ProPetro traded down to $10.91 this week, near a record low and 57% below its peak in April 2019.

Across the United States, the total number of DUCs is anticipated to have fallen by about 100 in July to 8,108, according to estimates from the U.S. Energy Information Administration. The only major U.S. shale field still adding to its DUC backlog is the Permian Basin, which stretches across West Texas and eastern New Mexico.

In the Permian, the number of DUCs is expected to rise by 9 in July to 3,999, the EIA said in its latest Drilling Productivity Report.

Reporting by Liz Hampton
Our Standards:The Thomson Reuters Trust Principles.
mattreue
Posts: 50
Joined: Mon Oct 02, 2017 12:23 pm

Re: Texas completions down

Post by mattreue »

This is related to my post in other comment. Rystad is saying completions (fracking) in May and June reached records!! Not a decline. The RRC is delayed data, according to my understanding.

https://www.rigzone.com/news/permian_fr ... 09-article This rigzone article is based on Rystad's analysis of fracking activity. Rystad is using FracFocus. I had to look it up. It is a chemical reporting registry. Seems like all of the shale producing states require wells to report to this website. So, it may be more up to date and current than relying on completion data from sources like the TRCC.
mattreue
Posts: 50
Joined: Mon Oct 02, 2017 12:23 pm

Re: Texas completions down

Post by mattreue »

Okay, after reading Rystad's press release, and fine print, their "fracking completions" is all based on modeling of the FracFocus information. Which Rystad says is on average 3 months delayed. So, no better than TRCC data.

In addition, their modeling totally ignores companies maybe front loading their fracking budgets in the beginning of the year or slowing down their fracking due to lower oil prices. Rystad's model is just extrapolating out the trend over the past 3 months. From Dec 2018 (crash in fracking completions) to mid spring (increase in completions with new year budgets AND higher oil prices), completions increased substantially. Rystad's model then predicts what the completion rate was in May and June based on the increase from Dec 2018 to March 2019.

It is flawed. As it does not take into account decreases in oil price or budgets happening real time.
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