U.S. exploration and production (E&P) companies are completing wells at record rates, outpacing new wells by nearly 250 a month, according to Raymond James & Associates Inc.
Analyst John Freeman in a note to clients Monday said the domestic count of drilled but uncompleted wells, aka DUCs, has dropped by nearly 3,300 from nearly 9,000 strong in July 2020.
In the “largest (and quickest) drawdown to date,” the current DUC inventory is crossing the critical “normal level,” Freeman said. “Over the last year, completions have outpaced new drills by nearly 250 wells/month, an unsustainable delta of which has never occurred.”
E&Ps since July 2020 have maintained production levels mostly “by tapping their vast supply of DUCs, opting to forego costlier new drills in...