Source: Land Rig Newsletter | September 2017
The flat lining US active land rig count has come just ahead of fresh growth in the number of drilled but uncompleted (DUC) horizontal wells relative to the status of the rig count, according to the September issue of Platts RigData’s Land Rig Newsletter.
It is the nature of tracking DUCs that the metric must always be a lagging indicator. In observing the above chart, it’s important to note that what the data show for DUCs represents a sample from 2 months prior.
So after growing nearly nine fold from a point just ahead of the onset of the 2015–2016 drilling bust, the inventory of horizontal DUCs began to decline just before the rig count bottomed at midyear 2016. Prior to this point, the month-to-month variances in the horizontal DUC inventory had been positive increments. It turned south and remained negative through nearly all of 2016.
In the wake of a one-third rebound in the active rig count in the first half of this year, the horizontal DUC inventory turned positive as well, adding about a net 450 wells. A fairly sizeable spike in the inventory arrived with July samples, just before the active rig count flat lined starting in July. The rig count was perfectly even from July to August, and in September began to slide.
So expect to see the horizontal DUC inventory growth start to level out and then shrink as the yearend approaches.
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