The nation still has a lot of energy in the bank, but not as much as it did a year ago.
Data published monthly by the U.S. Energy Information Administration shows a tally of drilled, but uncompleted (DUC) wells across the Lower 48 in June stood at 7,659.
That’s less than the 8,248 drilled, uncompleted wells the agency counted the same month in 2019.
Steve Agee, an economist and dean of the Meinders School of Business at Oklahoma City University, said drilled but uncompleted wells represent a piggy bank of sorts that energy companies can draw upon during lean times to keep production totals from entering a tailspin.
While companies sometimes are required to keep drilling new wells to avoid losing leases, they often have contractual leeway that gives them time to bring wells to production, he explained.
“Drilled, uncompleted wells are like savings accounts,” Agee said. “I would expect to see numbers of those declining across the nation, given the prices that energy companies are getting for oil and gas because of reduced demand.
“Those factors combined are resulting in fewer wells getting drilled,” he continued. “To bring more production online, it would be much less expensive for a company to go to a previously drilled, uncompleted well and complete it than it would be to drill something new.”
The reduction is particularly noticeable in the Anadarko Basin, where the agency reports the number of DUC wells in June was just 710, compared with 939 a year earlier.