Data provided by the U.S. Energy Information Administration shows the number of drilled but uncompleted wells in the Anadarko Basin of which Oklahoma is a large part continued to decline as of last month.
The EIA reported Monday that it estimated the number of DUCs was about 6,521 in the seven major tight oil and shale natural gas basins including the Anadarko.
The number was higher than the 4,425 DUCS in 2013 which is the earliest year in the data provided by the EIA. The government stated that nearly 40% of the CS or 2,616 are in the Permian Basin of western Texas and eastern New Mexico.
The latest report indicated the government estimated that the U.S. DUC inventory peaked at 8,874 DUCs in June 2020. From June 2020 through May 2021, we estimate that DUCs declined by 27%, or by 2,353 DUCs. Since the COVID-19 pandemic began, exploration and production (E&P) companies have cut capital expenditures, deployed fewer rigs, and reduced oil and natural gas production in response to lower demand and lower prices. DUCs help operators produce oil and natural gas at a lower cost.
The EIA estimates DUCs by examining the difference between records of drilled wells and completed wells each month; the difference equals the net change in the DUC inventory, or well count. The DUC inventory estimates depend on assumptions about the wells reported to FracFocus.
The administration estimated that most DUC wells are completed and begin producing hydrocarbons within one year after they are drilled. However, the timeline for completing wells can vary based on a variety of factors, including the prices of crude oil, petroleum products, and natural gas.
Source: EIA