With the recovery of commodity prices, operators have been hunting... DUC hunting.
To maintain capital discipline, operators have held back on drilling rigs while sustaining production levels by completing drilled but uncompleted (DUC) wells.
Since the DUC accumulation peak of June 2020, the nationwide count is down almost half (48%).
2021 DUCs dropped 40% year-over-year
Not all basins are the same -
Appalachia vs. Haynesville
Renewed drilling activity in the Haynesville has kept the y-o-y DUCs reduced by 8%
In contrast, Appalachia has seen DUCs reduced by 41% in 2021 to an all-time low (since numbers have been recorded starting in 2014)
With fewer DUCs, if shale operators plan to maintain or grow production, rig counts will likely increase in 2022.
Based on the Dallas Fed Report for the 4Q 2021
~75% indicate an increase or no change in oil production
~85% indicate an increase or no change in natural gas production
~90% indicate an increase or no change in CAPEX
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