Experience RS

DUC Trends in the L48

Drilled uncompleted wells (DUCs) more than doubled over the past decade, rising from 4,200 to over 8,700 as of 3Q19 (Figure 1). RS Prism data show that the Delaware, Midland, DJ, SCOOP | STACK and PRB plays contributed to the increasing DUC inventory since 2011. The count in these plays increased from about 4,000 to 5,000, or growth of about 24% since 1Q18. More mature plays such as Bakken, Eagle Ford, Marcellus, Utica and Haynesville exhibited a slow decrease in DUC count over the past couple of years, with the total dropping about 7% from 3,700 in 1Q18 to 3,400 as of today. Less active plays, such as the Barnett, Fayetteville, Mississippi Lime and Uinta, depleted most of their DUC inventory by 2015.

FIGURE 1 | Percentage Distribution of DUCs per Play Plotted Against WTI ($/bbl)

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It’s interesting to note that the estimated DUCs total across L48 has increased back to 2015 levels (Figure 2), with the Midland and Delaware basins accounting for 52% of the growth. Based on the historic trend, it appears that plays in the orange wedge in Figure 1 will most likely continue to exhibit a slow depletion in DUC inventory while the Permian Basin will continue to add more DUCs to the pond if the industry continues to endure the current pricing environment.

FIGURE 2 | WTI ($/bbl) Pricing and Total L48 DUC Estimates

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