EIA Sept Drilling Report: Watching DUCs Fly Away

ducks-flyingYesterday MDN’s favorite government agency, the U.S. Energy Information Administration (EIA), issued our favorite monthly report–the Drilling Productivity Report (DPR). The DPR is the EIA’s best guess, based on expert data crunchers, as to how much each of the U.S.’s seven major shale plays will produce for both oil and natural gas in the coming month. The September marks a new milestone–the EIA has added a new tab of information for Drilled but UnCompleted wells, called DUCs in the business. Beginning with this month’s report, the EIA now includes estimates for how many DUCs there are, by shale play. The ongoing meme for sometime has been that the DUC inventory has been dwindling, with drillers not willing to drill new wells given the low price of oil and gas. To keep things moving (and revenue coming in the door) drillers have taken to completing wells they drilled but never finished, or “completed” as it’s called in the business. Completing a well includes fracking it and hooking it up to production. As DUCs go down, and as new wells are not begun, it portends a coming decrease in supply and therefore a coming rise in prices. That’s what drillers, midstreamers, gas traders and others watch for. So this new section in the monthly DPR will be eagerly watched. So what does the September DPR show for predicted production in the Marcellus and Utica?…

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