The US Energy Information Administration’s (EIA) March 2018 DPR (“Drilling Productivity Report”) showed that DUC (drilled but uncompleted) wells for the seven major shale regions[1. Bakken, Appalachian, Eagle Ford, Permian, Niobrara, Anadarko, and Haynesville] grew by 110 to 7,601 in February 2018. The Permian alone added 122 DUC wells, offsetting the decline in DUC wells in some regions. Appalachia saw the highest reduction in its DUC wells, by 19. In the Niobrara, DUC wells declined by 16.
After the Permian, the second-highest rise in DUCs in February was in the Eagle Ford, which added 30 DUC wells.
What’s the reason for high DUCs in the Permian?
The EIA noted that the reason for more wells drilled than completed in the Permian could be a wider spread between WTI-Midland crude oil and the WTI-Cushing crude oil prices, which suggests the possibility of transportation constraints. We’ll discuss these constraints more in the next part of this series. The implementation of strategies could be another reason for lags in well completion, as completion equipment might not be deployed until all wells are drilled from a single pad.
Despite the lag in well completions, the EIA suggests that average output per well indicates that productivity—based on initial production rates—has continued to rise in the Permian region.