Linda Htein, a director at energy consultancy Wood Mackenzie, said completing DUCs was a great way to sustain production without adding a bunch of rigs or increasing capital expenditure. N has slashed its DUC backlog in the last 18 months. At current well completion rates, the EIA estimates that the top U. Unless shale producers start drilling new wells, exhausting the DUC backlog "could limit oil production growth in the United States in the coming months," the EIA said.
N showed on Friday. But that rig count is historically low compared with other periods when crude oil futures prices were near similar levels or at even lower prices. Subscribe for our daily curated newsletter to receive the latest exclusive Reuters coverage delivered to your inbox. Petroleum Office. Andrew C. Inkpen, Michael H. Accessed Jan. Financial Accounting Standards Board. Company Profiles. Your Privacy Rights. To change or withdraw your consent choices for Investopedia.
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Table of Contents Expand. About Hydrocarbons. Upstream, Midstream, Downstream. Understanding Oil Production s. Gas Production Numbers Explained. Drilling and Service Companies. Key Takeaways The oil and gas industry is broken down into three segments: upstream, midstream, and downstream.
Midstream companies are responsible for transportation from the wells to refineries and downstream companies are responsible for refining and the sale of the finished products. Well-servicing companies conduct related construction and maintenance activities on well sites.
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Compare Accounts. Rusty says that DGO has been greatly helped by the so-called "dash for shale" in the US over the past decade, whereby oil and gas firms gave up traditional oil and gas wells to switch to fracking instead. In very simple terms, unlike traditional wells where oil and gas is sucked up, fracking involves first injecting a high pressure mixture of water, sand and chemicals into shale rock.
This fractures the rock, and allows the removal of vast quantities of oil and gas that wasn't previously accessible. Rusty says the industry-wide move to fracking, and its higher production volumes, meant that DGO has been able to buy thousands of old, but still productive, traditional wells cheaply, and rapidly expand the business.
To help raise funds for continuing expansion, in the company decided to go public and sell its shares on a stock exchange. More The Boss features:. Energy sector analyst James McCormack of Cenkos Securities says that DGO's strategy of "acquiring low-cost, long-life, low-decline [oil and gas] production" is "a virtually unique proposition".
The long-term plan at DGO is to keep buying wells to replace any that eventually come to the end of production, and Rusty says the firm is now looking to expand into other regions, such as down in Texas.
In the more immediate term, he says that he is relaxed about the big falls in oil and gas prices since the start of the coronavirus pandemic, both because he has long-term "hedges" or agreements in place on what price he sells his production for, and because his business operates more efficiently than its larger rivals.
He can also turn to his dad for help and advice. His father, Rusty Sr, is the supervisor for the company's northern West Virginia operation.
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