Are Bakken DUCs A Big Deal? -- December 27, 2015

Disclaimer: in a long note like this, there will be typographical and factual errors. If this information is important to you, go to the source.

A couple of days ago I posted a poll asking whether "Bakken DUCs are a big deal?"

I had planned to write about DUCs awhile ago but have decided to put that discussion off. I feel I need at least one more month of data -- which we won't get until mid-January, 2016, when the next Director's Cut comes out, with the November, 2015. Production data should be available prior to the publication of the Director's Cut.

At that post I linked a New York Times article on DUCs.

Today, I'm just going to post some observations, keeping comments to a minimum:

Worksheet (explanation below the worksheet):

Month/Year	Producing Wells	Delta	Average	Bbls/Well	Average	Active Rigs
January 2013	5166	118		4048
	5318	152		3775
	5469	151		4093
	5621	152		3883
	5738	117		4034
	5900	162		3860
	6108	208		4111
	6308	200		4166
	6455	147		4040
	6657	202		4099
	6790	133	158	4034
December 2013	6840	50	149	3925	4006	187
January 2014	6944	104		3905
	7066	122		3527
	7250	184		3906
	7469	219		3771
	7685	216		3934
	7868	183		3919
	8064	196		4040
	8289	225		3994
	8500	231		3951
	8620	120		4021
November 2014	8730	110		3864
	8947	217	177	4032	3905	173
January 2015	9051	104		3865
	9168	117		3412
	9421	253		3716
	9529	108		3492
	9709	180		3645
	9912	203		3489
	10044	132		3549
August 2015	10115	71		3466
	10158	43		3268
	10298	140	135	3353	3526	62

This table includes only Bakken wells in North Dakota as defined by the NDIC 

• The most recent data available is October, 2015
• I believe the NDIC announced the one-year extension to complete wells was in November, 2014
• As of October, 2015, there were 10,298 Bakken producing wells 
• There are currently about 10,500 producing Bakken wells
• Average production per well, in round numbers, column 6:

• in 2013, Bakken wells produced on average 4,000 bbls/month
• in 2014, Bakken wells produced on average 3,900 bbls/month
• for most of 2015, Bakken wells averaged 3,500 bbls/month

• Average change in number of Bakken wells month-over-month, column 4: 

• 2013: 149
• 2014: 177
• 2015 to date: 135

The change in the number of producing wells is a combination of new wells coming on line (including previous wells taken off-line for some reason) and older wells being taken off-line. 

Note: in column 4, the averages are for the calendar year. For 2013, there are two averages provided. For the first 11 months, the average change in the number of wells month-over-month was 158 (December, with only 50 new wells was an anomaly, so I wanted to see the average without December's data; the average for the year -- all 12 months, including December -- was 149 more wells on average month-over-month).

When looking at the monthly production/well, remember this incredibly important point: in 2013, they were drilling across the entire Bakken. In 2015, drilling had shifted to the best spots in the Bakken. Average production has decreased about 500 bbls/month/well in 2015 compared to 2013.

Some other observations:

• in 2013, when they were drilling "all-out," the average number of producing wells increased by about 150 wells month-over-month; the number of active rigs: 180
• in 2015, when the severe plunge in the price of crude oil had continued, the average number of producing wells increased by about 135; the number of active rigs: 65
• when one throws out the two anomalous months in 2015 (August and September), the average number of producing wells increased by about 155 wells month-over-month

Disclaimer: in a long note like this I may have made simple arithmetic errors. In addition, there may have been errors in transcribing data from the NDIC source to my worksheet. If mistakes are noted, they will be corrected. Do not use this information if this is important for you. If this is important for you, go to the source.

So, maybe one can add this information to the question whether DUCs are a big deal.

By the way, here's another look at DUCs. Take a look at Robinson oil field, a fairly active field over the past few years. The data goes back to 2010, and the list is up-to-date (although total production for all wells has not been updated).

One can quickly scroll down the list. IPs in bold blue are wells that are currently DUCs or were DUCs at one time, and have since been completed. Some DUCs will have been missed. When next month's data comes out, some (many? most?) of the wells currently on conf status will go to DUC status.

You might note the Sinclair well back in 2013 that is a DUC. What gives? 2013 was well before the November, 2014, date when an extension for well completion was approved. That Sinclair well was permitted in 2013, but was not spud until February 2, 2015; it reached total depth February 27, 2015, but it is now a DUC (has not been fracked). This will be a good well to follow. Although it is on DUC status, it will be interesting to see if the well is completed within a year of spud (February, 2016); if not, how soon after.

Another active field one can look at is MRO's Bailey field to get a feel of the prevalence of DUCs.