Rystad Energy: US DUC Inventory to Decrease

The oil and gas industry will see 800 fewer drilled, but uncompleted oil wells (DUCs) in 2H 2016, according to industry consulting firm Rystad Energy. The company believes horizontal oil completion activities in U.S. shale plays will surpass drilling operations by 30 percent, which will be sufficient enough to balance the decline in base production.

Currently, the U.S. has 4,000 DUCs which are estimated to hold nearly 2 billion barrels of oil reserves. While idle wells in the United States are considered normal, there appears to be an overabundance currently. This is due in part to the downturn that caused significant delays in projects and a decline in drilling activity.  

“Research shows that operators are now starting to complete wells that have previously been put on hold deliberately,” Artem Abramov, senior analyst and product manager, Rystad Energy, said in a release. “This comes as more than 90 percent of the accumulated oil DUC inventory can be commercially completed at a WTI of [$50 per barrel].”

Royal Dutch Shell is one such company that seeks to use its well acreage to sustain the company’s cash flows. Bruce Palfreyman, general manager of Shell’s Permian asset group, said Monday that the company believes it has the best position in the Delaware Basin, part of the Permian Basin in West Texas, and sees future production potential from DUCs in the Permian Basin.

Citing the significant production decline recently in North Dakota – which suffered an all-time high decline rate in April 2016 of 70,000 barrels per day (bpd), Abramov said the decline was due to older “low decline” wells that were brought on prior to 2016.

“It is not the first time such temporary shifts in base decline are observed, and they were caused by road restrictions imposed by the state over the month,” said Abramov. “This trend is unlikely to persist and should not be extrapolated to the US Shale industry in general.”

 

Valerie is an experienced writer and editor dedicated to providing useful and relevant career news about the oil and gas industry. Email Valerie at valerie.jones@rigzone.com

WHAT DO YOU THINK?

Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies
Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE

More from this Author
Valerie Jones
Editor, Careers | Rigzone
 -  A Day in the Life of ... Patricia Mori... (Sep 28)
 -  Dallas Fed: Worst of Oil Bust Over (Sep 28)
 -  Freeport-McMoRan Makes Further Job Cut... (Sep 22)
 -  ExxonMobil: Population, Economic Growt... (Sep 21)
 -  BLOG: Are We There Yet? Oil, Gas Worke... (Sep 19)


Most Popular Articles

From the Career Center
Jobs that may interest you
Derrickhand
Expertise: Derrickman
Location: New Iberia, LA
 
Motorhand
Expertise: Motorman
Location: New Iberia, LA
 
Floorhand
Expertise: Floorhand / Roughneck
Location: New Iberia, LA
 
search for more jobs

Brent Crude Oil : $48.69/BBL 5.91%
Light Crude Oil : $47.05/BBL 5.32%
Natural Gas : $2.952/MMBtu 1.60%
Updated in last 24 hours