500,000 bopd 'Fracklog'? | Russell T. Rudy Energy LLC
A recent article in “World Oil” cites analysis by Bloomberg Intelligence which indicates that the ‘fracklog’ (inventory of drilled and cased but uncompleted wells or DUC’s) could total 4,731 wells capable of producing 500,000 barrels of oil per day (bopd). This would be more than the annual production of the nation of Libya.
Some industry observers think that the operators of the DUC’s are waiting for fracking and other completion costs to fall further before completing these wells. Others, including Bloomberg, think that a price of $65 per barrel will drive operators to bring these wells on line. Such a sudden surge in production could stifle any efforts at price recovery, as such as large increase in supply would only exacerbate the current global surplus estimated by the Energy Information Administration at more than 1 million bopd.
According to Phil Flynn with Price Futures Group in Chicago “One of the big reasons why production is finally falling is because of these fracklogs.” Apparently ConocoPhillips CEO, Ryan Lance, tends to agree. At the recent IHS CERA Week Energy Conference in Houston, he stated that increased new well completions would only increase the supply glut, depending on whether oil demand rises.
To read the article in its entirety, please go to http://www.worldoil.com/news/2015/4/24/oil-at-65-could-free-500-000-bopd-from-shale-fracklog .
