The number of drilled but uncompleted wells (DUCs) in the U.S. shale patch has declined by 27 percent since the peak in June 2020, the Energy Information Administration (EIA) has estimated.
DUCs allow exploration and production companies to pump crude oil and natural gas at a lower cost, so it's no surprise that the number of DUCs has dropped since the peak in June 2020. Back then, operators shut in production because of the low oil and natural gas prices and the crash in global oil demand in the pandemic. E&P firms have tightened spending on drilling activity since the COVID outbreak early last year, and they are tapping more DUCs to maintain production rates.
According to EIA estimates, the U.S. inventory of DUCs peaked at 8,874 such wells in June 2020. Nearly a year later, in May 2021, the most recent month available, the EIA estimated that the United States had about 6,521 DUCs in the seven major tight oil and shale natural gas basins-the Permian, Eagle Ford, Anadarko, Appalachia, Bakken, Niobara, and Haynesville.
Currently, almost 40 percent of DUCs, or 2,616 DUCs, are in the Permian Basin.
The total number of DUCs in the U.S. fell by 27 percent, or by 2,353 DUCs, between June last year and May this year, the EIA has estimated.
"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 noted.
The EIA's latest Drilling Productivity Report from mid-June showed that the number of DUCs fell by 247 between April and May. The report also showed that U.S. shale output from the seven most prolific shale basins is set to grow by 38,000 bpd month over month.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More