We revised our DUC inventory for Haynesville - LA up by 60 wells.
LA state data has been suffering abnormally long delays and the logic we had in place to assign spud dates from satellite rig observations to new permits was under-representing the number of spuds when compared to final spud assignments from delayed state data. We have been working to find more robust ways to handle LA data since the increase in delays has become more disruptive, this change is a part of that effort. We are now incorporating LA permits directly from individual well records that we gather ourselves rather than relying on aggregated reports. There are no changes to any other dataset including completions and our short term forecast. The discrepancy is isolated to spud dates.
Our long term and short term forecasts remain unchanged. Our thesis behind our view was not predicated on DUC inventory exhaustion. Rather, we continue to believe that with DUC drawdowns, operators in the region are forced to decide how they want to continue maintaining production by either committing new rigs or reducing completions. Until last month, rigs had not been committed to avoid drawing on DUCs. The general rule of thumb is ~2.5 rigs for each frac crew, this holds especially true for Haynesville - LA and as shown in the chart below, the recent growth in rigs has helped stabilize the DUC inventory for the time being. As you can see from the chart of DUCS and the rig-to-frac crew ratio below, the ratio level is directly related to the slope of the DUCs curve. (Focus on the blue and red dotted lines, which are the moving averages of the ratio and the DUCs, respectively.)
We’re not making excuses; these incorrect spud assignments leading to a DUC inventory revision in an important region like Haynesville is not acceptable. It's our mission to always bring you the most accurate production intelligence on the market and we hate revisions as much as you do. Ensuring data quality is a never-ending process, we collect data from hundreds of disparate sources that each deliver results in distinct and changing ways with nuances that have to be understood and accounted for. Our goal is to keep revisions small and infrequent.
If you have any questions about this revision please contact us at support@synmax.com