Monday, July 1, 2019

Notes From All Over -- Part 1 -- July 1, 2019

From Energent this morning: are there really 4,000 DUCs in the Permian? Link here.
To many analysts and investors who monitor energy sector, drilled-but-uncompleted well (DUC’s) counts are an important metric along with CAPEX plans, acreage grades, and regional risk factors that might affect the production level in the near-term. [One might note that "rig count" was not in that short list. LOL.]
As E&P’s increasingly focus on optimizing field development through multi-well pad drilling in a factory style, it is important to understand how this phenomenon could impact the DUC’s going forward. Energent’s undertaking begins with a well-by-well assessment of DUC counts in the major unconventional basins.
Energent data suggests that post-downturn (Q4 2017 – now) accumulation of Permian DUC’s were not only entirely generated by multi-well pads which consist of between 2 and 4 wells but there was also a sharp drawdown of DUC’s from single-well pads totaling nearly 200. This could suggest tightening capital market for smaller E&P’s that mostly drill vertical and deviated wells.
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2 comments:

  1. I recommend to think of the DUCs in terms of "months of inventory". Take an average of last few months of completions/month. Then divide DUCs by that number.

    Results (months of DUC inventory)

    Oil plays:

    Permian: 7.9
    Eagle Ford: 7.1
    Anadarko: 6.0
    Bakken: 5.4
    Niobrara: 2.8

    Gas plays:

    Haynesville:4.2
    App: 3.0

    Average of all plays: 5.9

    So yeah, the Permian does have a relative lot of DUCs. But so does the Eagle Ford. Conversely inventory seems very light in the gas plays and the Niobrara. Bakken and Anadarko probably about normal.

    ReplyDelete
    Replies
    1. That's actually a very good way to think about that. Thank you. So, for the Permian right now, about 7.9 months of inventory (7.9 months to bring the existing DUCs on line; 5.4 months for the Bakken.

      I track ND DUCs here: http://themilliondollarway.blogspot.com/2018/07/update-on-ducs-july-14-2018.html.

      Around 970 DUCs in the Bakken. 30-second soundbite - about 1,000 DUCs at any given time over the past few years, with a range of 800 - 980.

      Wells that are off line for other reasons, about 1,500.

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