Drilled-but-uncompleted (DUC) wells in North Dakota continue to stay historically high above 800, and they will stay up there until oil prices reach $50-$55/bbl and remain there for 90 days or longer, according to state officials keeping tabs on the state's oil/natural gas industry in the Department of Mineral Resources (DMR).
"Operators remain committed to running the minimum number of rigs while oil prices remain below $60/bbl WTI," said DMR Director Lynn Helms in his most recent monthly production report released last Friday. Helms said well completions were essentially unchanged in the two most recent months for which there are complete statistics -- May (45) and June (44).
"Oil price weakness is the primary reason for the slow-down and is now anticipated to last into at least the third quarter of this year and perhaps into the second quarter of 2017," said Helms, who did acknowledge that DUCs went down in June by 44 to 887 from the previous month.
"I wouldn't call 887 'low,'" said DMR's chief spokesperson in response to an inquiry from NGI's Shale Daily. The question is whether DUCs, indeed, are trending down, and the spokesperson doesn't think so.
"In June of 2015, the count was 848, but that was still well above 585 recorded a year earlier in June of 2014," she said. "The DUC count should decline when WTI prices hit $50-$55/bbl for 90 consecutive days."
Is it possible that the uptick in older wells being shut in by producers could allow for more DUCs being completed? Again, the DMR spokesperson said it was unlikely.
"The shut-in well counts include primarily older, conventional wells as vindicated by the fact that the conventional well count fell while Bakken [unconventional} well counts continue to rise," she said. For June, 11,129 (84%) of the 13,239 producing wells in the state were unconventional Bakken-Three Forks wells.
"More than 98% of the state's drilling now targets the Bakken/Three Forks formation," said Helms, who added that inactive wells dropped by 98 to 1,486 at the end of June from the previous month.