U.S. Energy Information Administration said this week the nation’s crude oil production could be limited by the declining number of DUC wells (drilled but uncompleted) and natural gas pipeline constraints. More wells were completed than drilled in U.S. from July 2020 through September 2022, and the number of DUC wells fell to 4,333 – fewest since at least December 2013 when EIA began estimating the DUC count. Oil & Gas Journal said the declining DUC count “reflects producers’ caution about increasing capital expenditures needed to drill new wells after the disruption to the petroleum by covid19.”
Permian Basin accounts for about 60 percent of oil production in seven major U.S. regions, EIA said, and in first nine months of 2022 there were 3,904 completions and 3,533 new wells drilled. Permian’s DUC count decreased from 3,590 in July 2020 to 1,103 in September 2022.
Because most natural gas in Permian is produced with and as a result of crude oil production, EIA said, limitations on the ability to ship natural gas from Permian (Blast, Oct. 21, 2022) could limit future crude oil production growth in the region. Natural gas prices at the Waha hub in west Texas fell into negative status Tuesday as surging Permian production “collided with offtake constraints.”
