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US to reach highest monthly total of wells franked after March 2020

Oil&Gas Materials 26 January 2021 09:48
US to reach highest monthly total of wells franked after March 2020

BAKU, Azerbaijan, Jan.26

By Leman Zeynalova – Trend:

As of 21 January 2021, there are 626 started frac operations in North America for December 2020, Trend reports citing Rystad Energy.

The company expects the month’s fact-based coverage to be almost complete. “For January 2021, we project that there will be 830 wells fracked, the highest monthly total after March 2020, when the Covid-19 induced downturn began.”

Rystad Energy estimates that the number of drilled but uncompleted wells (DUCs) that accumulated at the height of the pandemic has already subsided to pre-Covid-19 levels in the US.

“After swelling to a multi-year high of 6,548 wells in June 2020, the number of such wells in the country’s major oil regions* slimmed down to around 5,700 wells by the end of December 2020.

The inventory of ‘live’ DUCs, which excludes tentatively abandoned wells drilled a long time ago, also declined by around 800 wells in the same period, from 4,353 in June to 3,528 in December. The current level of horizontal oil ‘live’ DUC count is comparable to the level seen in early 2020, just before the market downturn started.

Given the recent recovery in oil prices, the industry is enjoying the flexibility of further accelerating fracking activity beyond current levels in the first half of the year. Such an acceleration could be delivered, as can be implied from the ratio of the current ‘live’ DUC inventory to the run rate of fracking, which is still in the six-to-eight-month range, compared to the normal level of about three months seen in 2018-2019,” said the company.

The US Energy Information Administration (EIA) said in its drilling productivity report that the total number of DUC wells dropped from 7,443 in November 2020 to 7,298 in December 2020. DUCs in Anadarko stood at 656, Appalachia – 584, Bakken – 778, Eagle Ford – 996, Haynesville – 318, Niobrara – 442, Permian - 3,524.

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