Rigs and Spreads Apr. 21: DUCs continue to decline

  • Rigs counts gained

    • Total oil rig counts rose for a change, +3 to 591, but are still below their level of last June

    • Horizontal oil rig counts were +3 at 543, no higher than last July

    • The Permian horizontal oil rig count was up 4

  • The pace of horizontal rig additions rose to -0.75 / week on a 4 wma basis.  

    • This number has been negative for 18 of the last 19 weeks

  • Our model suggests continued falls in the 1 / week range

  • Frac spreads were +7 to 290, but at about the same level as last May

  • Highlights from the April DPR report

    • DUCs: Earlier issues of the DPR showed small gains in the DUC inventory.  The current report shows declines instead, with continuous erosion in DUC counts since June 2020, albeit at the slow pace of 6 / week currently

      • At current estimated rig and spread productivity levels, we would expect the DUC inventory to continue to decline modestly

    • Crude and condensate production from key shale plays rose to 9.03 mbpd in March, up 80 kbpd from February, with shale oil output looking to set new all-time highs next month

      • Total shale oil production growth has averaged 42 kbpd / month over the last four months

    • Permian production was up 31 kbpd in March.  

      • Permian production growth has averaged 22 kbpd / month over the last four months

  • Overall, not too much change in the data, but for all that, production growth from key shale plays remains respectable according to the latest DPR.

Rigs and Spreads Apr. 21,pdf