RigData Insights

Backlogged Completions Likely To Grow

  • Tuesday, April 21, 2015
  • Posted By Unknown
There are widespread expectations for US oil production falling in the months to come, thus bolstering oil prices again before year end. But according to the RigData RADAR Report, despite 2H oil price projections of $60/bbl to $80/bbl, there has been little actual data so far to presume oil production will drop this year. In fact, there is a growing trend to “bank” frac jobs and other completions to accrue tax savings and await higher oil prices. For example, Bakken Shale backlogged completions total 825, a number likely to grow. Given the awful state of many operators’ overleveraged financial positions and the urgent need to revive cash flow, why wouldn’t many of them move to resuscitate production in response to positive price signals, especially if drilling new wells isn’t part of the cost equation? Additionally, ICF International contends there are significant tight oil resource opportunities for the medium to long term despite low oil prices: Of the 3.5 billion bbl added to US liquids reserves in 2013, 68% was from wells economic at $60/bbl and 37% at $40/bbl. 
 

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