The number of drilled but uncompleted wells in the U.S. is set to fall in 2016, according to Bloomberg Intelligence, as DUCs provide struggling exploration and production companies a less capital-intensive way of bringing new wells online.
Since the oil price began its descent in June 2014, DUCs have doubled to about 4,000.
“Inventory changes will likely vary by region, such as in North Dakota, where operators such as Continental Resources are expecting to see DUC levels grow as they continue to drill faster than they complete wells,” said Bloomberg Intelligence energy analyst William Foiles.
“Abnormal horizontal DUCs located in fringe acreage will almost surely remain uncompleted in 2016 without a substantial increase in oil and/or gas prices,” said Bloomberg Intelligence energy analyst Andrew Cosgrove. "The inventory will also work to provide a ceiling on prices should they spike, as operators would likely move quickly to complete DUCs should prices experience a significant rally," he said.
Here's where the DUCs are located...
...And here's how they've grown over time...
A version of this story originally appeared in Bloomberg's Oil Buyer's Guide Brief.