News

A big conversation piece around the oil and gas round tables is the large and vast inventory of drilled and uncompleted wells.

Controversy is not far behind this table talk as nearly all states or leasing agreements have requirements on when new wells have to be brought online after initial spud. In basins where economics are not favorable such as North Dakota the state has issued allowances of an extra year to defer the completion of these DUCs. There has been some talk of whether a DUC is considered a PUD or PDNP, and if it is PDNP how to discount the value to determine how much to lend against those assets. Landowners are also at a loss in some cases as money they thought they would be receiving after their division order came in has been put on hold indefinitely. Some operators will have to make the choice to complete the well and lose reserves or face a potential lawsuit from landowners and the state for not completing wells within the specified time.

In a previous life I used these DUCs in a search and destroy style mission; find operators with large capital expenditures requirements brought on by these DUCs but low budgets or high debt. These DUCs represented their prior success, when pricing was favorable, which was used against them to secure working interest (WI) and a foothold in future projects. Sifting through the immense data files and access databases to create these profiles was time-consuming and could lead to lackluster results if the database was not kept current. Advising companies on similar strategies now, using DrillingInfo’s Rigs Analytic platform makes this task and many others fast an easy, let...