American shale output has risen steadily over past months, but it’s a trend that’s about to change. Oil production is set to drop, starting August. It’s for a surprising reason – companies are having trouble procuring the equipment and skilled crews they need to bring newly drilled wells online.
DUC Wells On the Rise
Incomplete shale wells, also known as DUC wells (drilled but uncompleted), are increasing. Once the actual drilling work on a shale well completes, it needs to be hydraulically fractured (or fracked) and otherwise developed before production can begin. Shortages of required services have meant that U.S. oilfields have seen rising numbers of DUC wells over the past year. According to the U.S. Energy Information Administration, numbers have gone from under 5,000 six months ago to more than 6,000 now.
Over the past year, drilling companies have had a hard time recovering capital expenditures at prevailing oil prices. If supplies fall over the rest of 2017, there will be a way for both drillers and companies delivering oilfield service to raise prices. Schlumberger and Halliburton already have doubled prices over the last year.
Seize the Moment with Sigma
For drilling contractors, this is an opportune moment to invest in cost efficiency. By investing in technology such as the pulsation dampeners sold by Sigma Drilling Technologies, and paying attention to routine dampener maintenance and other services to keep production humming, contractors will be able to take advantage of market conditions and prime themselves for improved revenue.
Constraints that keep DUC wells off-line are not likely to last longer than a year, however. In many ways, the present moment is one worth seizing. If you’re interested in learning what Sigma’s technology can do for your business, call 281-656-9298 or fill out our contact form today!
