Oil rigs fell, -8 to 825
Horizontal oil rigs resumed their fall, -3 to 724
The 4 wma for horizontal oil rig changes rose to -3.0 / week. This metric should improve from here on out.
There was little action by play, but ‘Other US’ continues to roll off, down two horizontal oil rigs this week.
Frac spreads eased back again this week, -8 to 470. The frac spread ratio stands at 64.9%, well above its normalized value of 62.0%
The EIA published the April Drilling and Productivity Report this week. Highlights:
US shale production for February was revised down more than 200 kbpd compared to the previous report.
Revisions were negative across the board, with both the Bakken and the Permian revised down about 80,000 bpd
March production was estimated at 8.12 mbpd, 120 kbpd below last month’s estimate for February
Total production in the current report was estimated up by 87 kbpd for March over February
Year on year, production growth declined to 1.37 mbpd, compared 1.72 mbpd last month
On a trailing 3 month annualized basis, shale oil production is increasing at a 0.27 mbpd / year pace (v 1.15 mbpd / year last month), of which 0.16 mbpd (0.68 mbpd / year last month) is from the Permian alone.
The latest DPR report shows wells drilled continues to decline, from a peak of around 335 / week in November, falling below 300 in April
The number of wells completed has been increasing, and is predicted to continue to do so, from around 280 last fall to over 300 in April.
Completions should exceed wells drilled in April, an uncommon event in recent history
DUCs looks to peak in April
On the face of it, shale production may be beginning to turn. If this trend holds, oil prices could move very substantially higher.
If there is a recession in 2020, the graph below will be to blame