Updates
Later, 7:36 p.m. Central Time: see first comment below. I brought it up here to make it browser-searchable.
WSJ seems to be forecasting something that's already
happening...aggregate DUCS over the 4 oil basins (ie the Bakken,
Niobrara, Permian, and Eagle Ford) have now been lower in each of the
last 6 months, as oil well completions started picking up when oil
prices first started rising in the spring, while the DUC count in the
natural gas regions (the Marcellus, Utica, and the Haynesville) has
generally slowly declined since December 2013, as new natural gas
drilling fell to record low levels...
Original Post
From the linked article below, the new nominee: Tim Rezvan.
Tim Rezvan, managing director of Americas research at Mizuho
Securities USA Inc., said that while the untapped wells represent a
large resource, it will take time to begin pumping them.
“You can’t get those turned on overnight,” Mr. Rezvan said.
I don't know what he means by "overnight," but he's obviously not reading the MillionDollarWay blog. LOL. The production from any DUC completed in the Bakken will show up within 30 days, in the next Director's Cut. In the oil industry, production from a well within 30 days is pretty much "overnight."
From spud to production in the Bakken, we are talking a couple of weeks if the price is right.
From The Wall Street Journal:
U.S. oil and gas companies have drilled thousands of wells they have
yet to tap, creating a ready reserve of fuel that could surge onto the
market when energy prices recover.
As producers report quarterly
earnings over the next few weeks, a question looms: When will they start
exploiting these “drilled but uncompleted” wells?
While the
industry often has an inventory of drilled wells awaiting completion,
the backlog has grown significantly over the past two years as companies
like Continental Resources Inc.
and EOG Resources Inc.
deliberately delayed tapping wells to wait for higher energy prices.
Federal estimates show the number of such wells in the nation’s seven
most prolific drilling regions stood at 5,069 in September, up from
3,768 in January 2014, before oil prices began falling.
Because
companies have already spent the money to drill the wells, known in the
industry as DUCs, bringing on the supply they hold is cheaper than
drilling and fracking a new well. That means DUCs are an economic
proposition for many companies, especially with U.S. crude now
trading at around $50 a barrel.
Ryan Duman, a senior analyst at
energy consulting firm Wood Mackenzie, said he expects to see companies
completing many of the delayed wells in the next 18 months.
“You’re at a point where pretty much every DUC that’s sitting out there is in the money,” Mr. Duman said.
Wood
Mackenzie estimates that the industry has about 2,000 more wells
awaiting completion than it normally would. Those extra DUCs are capable
of producing more than 250,000 barrels a day of crude and 4 billion
cubic feet of natural gas a day, the firm estimates. That is equal to
roughly half of California’s daily oil output in July and West
Virginia’s daily gas production the same month.
Mr. Duman called the untapped resources contained in the DUCs
a “meaningful amount of supply” that would have “some implications on
commodity prices.”
Many of the DUCs, he added, are located in the
Marcellus drilling region of Pennsylvania and the Bakken in North
Dakota.
You can see all Geico Award 2016 nominees at
the link at the sidebar at the right. Obama would most likely win the 2016 award, but previous winners cannot be repeat winners; they can be nominated.
In the "Radicalized Muslim Terror" category, President Obama was nominated for his under-estimation of the JV team; went golfing; would get the intel briefing on the 15th tee. That nomination was made quite some time ago.
Today,
in The WSJ we read that the JV team has struck Kirkuk, even as the allies move in on Mosul. Having withdrawn 99% of US troops from Iraq, the US no longer has the capability of fighting the JV team in two different cities. Whatever.
