DUC DUC… NO. The Growing spread between Drilling Rigs and Frac Fleets.
The rig count in US land has increased by nearly 200 in 2022 while increases in frac spreads has trailed. The exhibit below highlights the widening spread between US land rig count vs frac spread which historically would translate into the building of DUCs (drilled but uncompleted wells).
So, what is really happening in the market? Are we building DUCs? The answer is no. Why?
The US land industry continues to achieve drilling and completion efficiencies allowing the industry to accomplish “more with less”. Advances in simultaneous hydraulic fracturing, zipper fracs, frac iron, automation, and improved operational cadence and execution on the surface have led to a completion efficiency of 4.7% in 2022 even though the average lateral lengths of wells drilled increased by 7.4%, and the number of stages completed per well increased by 9.1% (Kimberlite 2022 Hydraulic Fracturing report).
These results and observations really speak to the grit, innovation, and tenacity of the oilfield service suppliers and operators who continue to showcase world-class performance and drive drilling and completion efficiencies to new heights that many believe would one day come to an end.
As we approach year-end, let’s take this moment to thank all the hard-working men and women in the US land oil & gas industry who continue to overcome adversity and challenges to bring the needed energy to market to support our country, our standard of living, and our economy.
Kimberlite will continue to track industry trends and technology adoption including the growing use of dissolvable plugs, simultaneous hydraulic fracturing, use of recycled water, and other technologies. Feel free to reach out to discuss.