DUC wells

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dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

DUC wells

Post by dan_s »

Stifel:
"Recent EIA data for September showed total DUC wells down 2.6% while completions decreased 0.4% sequentially with a DUC to Completion ratio of 5.6, down from 5.7 in August. The total DUC well count was 7,740 in September, -2.6% m/m and +6.3% y/y, while the Permian (which accounts for 47% of DUCs) fell 1.3% m/m but rose 29.1% y/y. Monthly well completions were 1,390 in September, -0.4% m/m and +9.8% y/y, with the Permian decreasing 0.5% m/m (+15.5% y/y) to 552. Drilling and completions were down sequentially in all basins except the Bakken and Haynesville. Total completions exceeded wells drilled for the sixth consecutive month. Despite the large reported DUC backlog we remain concerned around tighter E&P capital spending leading to lower actual completion activity."

Drilled Wells

Total new drilled wells in September decreased 4.9% m/m (-16.5% y/y) to 1,184. The largest proportion of new drilled wells in September occurred in the
Permian at 42% of total with the greatest deceleration in drilling occurring in the Anadarko at -18.0% m/m.

Total new drilled wells in 3Q19 decreased 9.0% q/q (-12.1% y/y) to 3,740. Most of the new drilled wells in 3Q19 occurred in the Permian at 42% of total
with the greatest deceleration in drilling occurring in the Anadarko at -22.9% q/q.

Completed Wells

Total new completed wells in September decreased 0.4% m/m (+9.8% y/y) to 1,390. Most of the well completions in September occurred in the Permian at
40% of total with the greatest deceleration in completion activity occurring in the Anadarko at -4.7% m/m.

Total new completed wells in 3Q19 was flat q/q (+7.3% y/y) to 4,181. The largest portion of well completions in 3Q19 occurred in the Permian at 39% of
total with the greatest deceleration in completion activity occurring in the Haynesville at -11.2% q/q.

Drilled but Uncompleted Wells

Drilled but uncompleted wells were down 2.6% m/m but up 6.3% y/y to 7,740 in September. Permian DUCs accounted for 47% of the inventory while the
Niobrara decelerated the most at -6.7% m/m.

The ratio of DUCs to completions (D/C ratio) was 5.6 down 2.2% m/m and down 3.2% y/y indicating that well completions decreased at a slower pace
than DUCs (which also contracted).
• Wells completed exceeded wells drilled in September for the sixth consecutive month. The total surplus of 206 (more wells completed than drilled) in
September was led by the Anadarko at +59. All basins saw a surplus of completions over drilled wells.

Frac Spread, Rig Count & O&G Prices

The frac spread (or sometimes referred to as a frac fleet) is a set number of equipment that an oil field service company uses for hydraulic fracturing. In the week ending October 11, 2019 the frac spread registered 368, down 18.0% from the end of 2018 and down 23.7% from a high of 482 on 4/5/2019.

In the week ending October 11, 2019 the rig count registered 856, down 21.0% from the recent high of 1,083 at the end of 2018.

Regional WTI at Midland oil prices are currently trading at a $0.15 premium to Cushing compared to a significant discount in late August 2018 of $17.90.
Natural gas prices at Waha Hub in West Texas are currently +$1.24 mmBtu after dipping to a low of negative $4.63 on April 3, 2019.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: DUC wells

Post by dan_s »

Keep in mind that over 2,000 DUCs are "Dead Ducks" that will never be completed.
Dan Steffens
Energy Prospectus Group
par_putt
Posts: 565
Joined: Tue Apr 27, 2010 11:51 am

Re: DUC wells

Post by par_putt »

Are those DDUC wells ?
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: DUC wells

Post by dan_s »

They are wells in the DUC inventory that are quite old and considered sub-economic to complete.

There is a "New Normal" for the DUC inventory.
1. There has always been and always will be thousands of wells in the DUC inventory.
2. To improve their overall economics, upstream companies are drilling a bunch of wells from each pad and then completing them after the drilling rig moves off location. In addition to lowering per-well completion costs, the operator avoids the problem of parent wells creating a pressure sink that messes up the child well completions.
Dan Steffens
Energy Prospectus Group
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