SLB - Permian production hits new high US well inventory hits cycle low

The Department of Energy published its monthly drilling productivity report Monday, showing Permian production hitting a new record high, up 71kb/d MoM according to the DOE. However, the increased production comes as drilled but uncompleted wells "DUCs" fall to a near decade low.  DUCs are often considered a measure of 'ready-to-produce' inventory; having fallen by half since 2020, the stock of readily available wells sits at levels not seen since nationwide shale volumes were 50% lower. With producer discipline under a magnifying glass, analysts must account for accelerated capital investment to rebuild DUCs (NYSE:HAL) (NYSE:SLB), before accounting for E&P (NYSE:EOG) (NYSE:PXD) (NYSE:DVN) (NYSE:MRO) production growth spending in 2022.

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Permian production hits new high, US well inventory hits cycle low