DUCs Reported As Being Completed Are Not "Created" Equal -- July 14, 2021

Not ready for prime time.

A lot of analysts continue to talk about the inventory of DUCs decreasing. 

A random observation: the vast majority -- approaching 90% -- of DUCs coming off the "DUC list," being reported as completed are not yet producing oil in the Bakken. I don't think analysts realize this. This is an anecdotal observation on my part in the Bakken. I have no idea what is happening in the Permian. But in the Bakken, just because a DUC comes off the "DUC list" does not mean it's producing any oil. By regulation, DUCs must be reported within two years of the well being spud. So, at the end of two years, these wells are being said to be "completed" by the operator but the "devil is in the detail."

It looks like most DUCs being reported as completed, take another six months before going into full production, which makes sense. 

I was writing the above while watching Jim Cramer's Mad Money and then who should show up, of all people? Rusty of RBN Energy. So, the note above about DUCs had nothing to do with Rusty's comments on DUCs -- which were minimal.

Note: Rusty from RBN Energy on Jim Cramer's Mad Money tonight. What did he have to say?

• oil companies: huge free cash flow
• DUCs: being completed
• natural gas has gotten so expensive overseas, countries are turning to coal in some cases;
• takeaway: supply / demand pretty much in equilibrium
• for Jim Cramer, that means buying "the rails," specifically mentioning UNP and Southern Norfolk.