, 12 tweets, 6 min read Read on Twitter
1/11 on DUCs:

Common view suggests that, even without higher rig counts, lower 48 production of 8.5 mb/d can grow this year by running down drilled but uncompleted wells - or DUCs - inventories of more than 8,000 wells.
2/11 What are DUCs?

DUCs are the result of modern division of labour. A baseload inventory of DUCs therefore will always be present due to the scheduling of proppants, water, frac crews and other requirements.
3/11 More DUCs?

Recently, the ratio of DUC wells to completions has been rising. Producers build DUC inventories in low price environments—such as the weak Midland price environment of H2 18 related to pipeline constraints—and complete them at more attractive prices later. #oott
4/11 Permian matters

The #Permian holds more than half of crude oil DUC inventory. Let us focus on those 4,002 wells.
5/11 Vintage matters

Within the #Permian DUC count, >30% of DUCs are >five years old, and due to integrity or other issues, may never be completed. Moreover, lower IP rates would diminish their impact, while shorter laterals and shallower verticals also dampen their prospects.
6/11 Definition matters

DUC counts may be overstated in estimates because of how they are defined. EIA defines DUC as well tnot completed for 20 days after the start of drilling, but different basins have different time spans bw drilling & completion that may reduce DUC count.
7/11 Data Source

forecasters use data from groups such as Frac Focus, whose prompt completions data are incomplete for recent months & substantially revised each month, such that well counted as DUC may actually already be complete and in existing production statistics.
8/11 Location, Location, location

The potential of DUC well is affected by both its location and which company holds it. Approximately 73% of DUCs in the Permian are located in 10 counties: Reeves, Lea, Midland, Martin, Eddy, Pecos, Ward, Loving, Culberson, and Howard.
9/11 Counties have was vastly different IP rates...maybe @ShaleProfile can add a chart here for all above counties? #wti
10/11 For instance, Reeves County is one of the largest holders of DUCs, with most of those in natural gas-rich fields. Around 80% of DUCs in the county are in Phantom field, where gas-to-oil ratio is persistently greater than Permian average. #OOTT
11/11 @energyaspects concludes that 30% of Permian DUCs will fail to contribute noteworthy volumes of crudes, and that the volume contributed by the remainder of DUCs will not pose a material upside risk to their Permian growth forecast of 0.7 mb/d y/y average for 2019.
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