Monday, June 19, 2017

Random Update On DUCs Nationwide -- Bloomberg -- June 19, 2017

This is for the archives. Nothing new for folks familiar with the Bakken.

Bloomberg is reporting:
  • nationwide, 5,946 DUCs at the end of May, 2017 -- so, let's call it 6,000 DUCs nationwide and around 1,000 in the Bakken
  • this sets a three-year record (hard to believe that it's not an all-time record)
  • the Permian: in May -- operators drill 125 more wells than they would complete
  • the Permian: in May -- nearly 100,000 bopd in DUCs
  • breakeven price in the Permian as low as $35
For newbies, I could be wrong but I believe operators in the Bakken can leave a well uncompleted for up to two years. Prior to the collapse in oil prices, North Dakota required wells be completed within one year after being spud. Operators can get waivers to delay completing wells if not completed within two years, but those requests are considered on a case-by-case basis.

WTI closed at lowest level since November, 2016, and we're approaching the middle of the US driving season.

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First World Problems

I just got back from mailing two small, but relatively heavy, packages to family members in Portland, Oregon. Least expensive option, $25 for one and $12 for the other package. Remember those numbers.

Upon arriving home, I checked the WSJ on-line. This headline caught my attention: UPS to Add Delivery Surcharges for Black Friday, Christmas Orders. Delivery company seeks to recoup increase in hiring and reserving extra vehicles during busiest period.

I gasped -- UPS and FedEx are already more expensive than the US Postal Service. I could only imagine how "bad" the surcharge would be.

Hold your breath.

27 cents/package.

Okay, back to other first world problems. LOL. 

6 comments:

  1. re: breakeven in the Permian. lot of info in this simple graph from the Dallas Fed:
    https://twitter.com/kxviswan123/status/875342149759488000
    (found that on John Kemp's twitter feed)

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    Replies
    1. I agree 100% -- how much information is in this one graph. I posted the graph here:
      http://themilliondollarway.blogspot.com/2017/06/break-even-costs-for-new-wells-texas.html

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    2. yep, that's the same graph....hmmm...

      i have to believe that i saw that graph posted here, because i click through on all of your oil & gas posts, but what it was must have just not registered at the time...weekdays i'm working my way through dozens of posts a day, sometimes just trying to catch up, & i guess sometimes i'm not seeing everything clearly as i should....but on saturday, i drilled back through Kemp's twitter posts for the week, specifically to look at his graphs, & when i saw that graph there i finally understood what it was showing..

      sometimes i'm a bit slow...

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    3. Actually I've learned more from you than you will ever know ... sometimes it's just a random word or phrase or thought that puts me on the right track. Much appreciated.

      With regard to the graph, I think most folks note the "average" breakeven price. What caught my eye was the low end for breakeven prices. The breakeven price in the Permian is simply amazing.

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    4. thinking about that low breakeven price for parts of the Permian, i recall that the Wolfcamp runs between 2000 and 6000 feet thick...possible that might be why?

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    5. That would certainly be a huge piece but with fracking accounting for 2/3rds total cost one has to think of something else. .... I think it has to do simply with the total initial production (first six months) and the cheap transportation costs to east Texas.

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