Rystad Energy: US fraccing slowdown creates DUC well backlog

When it comes to the regional trends for the inventory of drilled wells awaiting frac services, Rystad sees a particularly strong build-up in the Permian Basin where almost 500 wells were added over the past three months. All other major liquids basins combined saw a build-up of about 270 wells in the same period.

“Usually there is a typical DUC build-up during winter months and a gradual drawdown during the spring and summer months. Contrary to the norm, in the last three months this metric jumped to 15 to 25 months of frac activity. However, in the second half of 2020 we might see a modest rebound in fracking without extra drilling,“ said Rystad Head of Shale Research Artem Abramov.

Drilled wells awaiting frac services have exceeded 5700 assets at the end of May 2020, the highest level since at least December 2017. In the end of 2019, DUC levels were at just above 5300 assets while in February, which is an interim low, the number fell to just below 5000.

The build-up since then is primarily driven by the wells that were drilled recently and are currently less than six months old (i.e. total depth was reached less than six months ago, but frac operations have not been started yet). This part of the inventory has increased from 1651 wells at the end of 2019 to 2970 wells now.

In Rystad's view, this is currently the most representative part of the DUC inventory, which suggests that many recent wells are left uncompleted and will probably be carried all the way into 2021, so the industry is well positioned to boost or protect production while staying within relatively low CAPEX levels.

Read the article online at: https://www.oilfieldtechnology.com/special-reports/16062020/rystad-energy-us-fraccing-slowdown-creates-duc-well-backlog/