With a 'sunken" cost already paid for drilling, it makes sense for producers to bring DUC inventory back online.

 My initial point was that with the large overhang of DUC wells, the Baker-Hughes rig count has lost some of its meaning. 

Artem Abramov
Rystad Energy
Olso,Norway

Many drilled but uncompleted (DUC) oil horizontal wells across US shale plays will become commercial if light, sweet crude oil prices remain at $40-50/bbl on the New York Mercantile Exchange.

Companies would have to spend an estimated $15 billion to complete an existing DUC inventory of about 3,700. Actual near-term spending is expected to be less. Operators are on track to spend $12.7 billion in the next 8 months on DUCs if spending stays at the June level.

Producers likely will boost completion spending when they become confident of a sustained oil price recovery. A total first-year production potential of 1.15 million b/d exists in DUC wells.

About 90% is commercial at $50/bbl, 80% at $40/bbl, and 55%, or 650,000 b/d, at $30/bbl. The Permian basin offers the largest cumulative DUC production potential of the US shale plays at 340,000 b/d.

Economics vary considerably across a given play. The Permian basin contains both very high-quality acreage and areas far from commerciality. Within the Permian, operators have focused attention on both the Delaware basin and the Midland basin.

The Delaware basin on average exhibits slightly better well-economics than the Midland basin.

The Bakken formation has 290,000 b/d of cumulative potential. It offers the most attractive DUC economics with an average breakeven price of $28/bbl. Only 10% of potential Bakken DUC production requires breakeven prices higher than $38/bbl.

DUC inventory outside the three largest liquid plays can add an estimated 200,000 b/d of first-year production at an average breakeven price of $61/bbl.