The slowdown in North Dakota well completions. AKA fracklog.
The increase in DUCs, or drilled but uncompleted wells, in North Dakota is getting to be old news. The new word of fracklog has emerged to describe and quantify the number of wells waiting to be fracked before they go into production. Two recent articles and then a graph of the fracklog.
Big headlines recently announced two companies have stopped fracking. This is neither a big story nor a new story.
Previously mentioned the following article which says Whiting Petroleum will stop fracking its wells in the second quarter. This means they will keep drilling but not frack & complete any wells.
2/25 – Energy Media Group at Bakken.com – Whiting suspends fracking, cuts budget 80 percent – investors cheer – The largest oil producer in North Dakota, Whiting, will put a hold on all fracking and completions beginning April 1. This will reduce the capital budget 80% in 2016.
Article does not say they will stop drilling, but there likely will be a big cut back there as well.
Bruce Oksol provides more background on this aspect of the slowdown in North Dakota:
2/25 – The Million Dollar Way – Frack-stop: CLR and Whiting to Stop Fracking in the Balkan-John Kemp – Continental (CLR) stopped completing wells in the third quarter of 2015. Whiting will stop completing wells in the second quarter of 2016. Both companies will continue drilling. Neither of them will perform the fracking and subsequent completion work to bring the wells on-line. They will both be putting the drilled wells in their fracking backlog.
When prices come up to acceptable level, both companies can frack and complete their wells, thus bringing a lot of oil on-line quickly.
The analogy that comes to mind is a company producing the components of its products but leaving the unassembled components on the inventory shelf.
Here is a graph of the backlog of wells waiting to be fracked and completed: