US shale oil: Frack count grows, production levelling out

June 23, 2016

Rystad Energy expects horizontal oil completion activity in the US Shale to outpace drilling operations by 30% in 2H16, resulting in the contraction of DUC inventory by 800 wells. These additional completions will support total US oil output by providing an additional 300-350 kbbl/d to the exit-2016 rate. The additional output will be more than sufficient to balance the base production decline. The inventory of 4,000 drilled but uncompleted oil wells (DUCs) is estimated to hold close to 2 billion barrels of oil reserves.

“Research shows that operators are now starting to complete wells that have previously been put on hold deliberately. This comes as more than 90% of the accumulated oil DUC inventory can be commercially completed at a WTI of 50 USD/bbl,” says Artem Abramov, Senior Analyst and product manager at Rystad Energy.

The recent extreme production decline - among the key crude producing states, North Dakota suffered from an all-time high historical decline rate of 70 kbbl/d in April 2016 - fell far outside a natural 10-20 kbbl/d range, which one would expect as a result of current completion activity and mature base production. The significant decline acceleration appears to have come from older “low decline” wells brought on-line before 2016.

“It is not the first time such temporary shifts in base decline are observed, and they were caused by road restrictions imposed by the state over the month. This trend is unlikely to persist and should not be extrapolated to the US Shale industry in general,” says Abramov.

 

The number of wells in Bakken is not sufficient to keep production flat and this trend is even more apparent in 2Q than in 1Q.

For all other plays, the number of new wells is almost sufficient to keep production flat.

 

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Article Contacts

Artem Abramov, Senior Analyst
Phone: +47 24 00 42 00
artem.abramov@rystadenergy.com

Julia Weiss, VP Marketing
Phone: +47 48 29 87 61
julia.weiss@rystadenergy.com

About Rystad Energy

Rystad Energy is an independent oil and gas consulting services and business intelligence data firm offering global databases, strategy consulting and research products.

Rystad Energy’s headquarters are located in Oslo, Norway, with additional research teams in India. Further presence has been established in Norway (Stavanger), the UK (London), USA (New York & Houston), Russia (Moscow), Brazil (Rio de Janeiro), Africa as well as South East Asia.

About NASWellCube

Rystad Energy’s shale well database, NASWellCube, provides you with a quick way to learn everything you need to know about the DUC inventory. It is possible to see how many wells are pending completion at play, operator or county level. Users can also display the fracklog in an integrated map viewer, and assess each well’s likely productivity and ultimate potential. Finally, NASWellCube Premium is a unique tool to evaluate expected completion cost per well and commerciality of the DUC inventory.