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Wednesday, April 15, 2015

$147.7 billion invested in drilling 45,000 U.S. oil, gas wells in 2013

WASHINGTON, April 8, 2015 ─ An estimated $147.7 billion was invested in drilling approximately 45,000 U.S. oil and natural gas wells in 2013, according to API’s 2013 Joint Association Survey on Drilling Costs. The number of wells declined slightly from 2012 and costs remained flat, but the average depth and total distance drilled increased, indicating a rise in efficiency.

“Even before the recent decline in oil prices, developers focused on maximizing each well, reducing the costs and surface footprint of energy production,” said API Statistics Director Hazem Arafa. “The well count didn’t rise, but the wells are getting deeper and more efficient. As a result, the U.S. is improving its ability to remain a competitive energy superpower, creating jobs and fueling economic growth.”

From 2012 to 2013, the number of new wells declined from an estimated 46,548 to 45,039, according to the survey. Expenditures held at an estimated $147.7 billion compared to $148.9 billion in 2012. In contrast, the average well depth increased from approximately 7,981 feet to 8,491 feet and the total well footage (horizontal and vertical distance drilled) grew from an estimated 365.9 million feet to 368.1 million feet. Total footage among shale wells, about 30 percent of wells surveyed, increased to an estimated 190.9 million feet from 188.8 million feet. In addition, demand for oil outpaced demand for gas, with oil wells accounting for 65.1 percent of expenditures in 2013.

Over the same period, U.S. crude oil production increased from an average of 6.5 million barrels per day (MMbbl/d) in 2012 to an average of 7.5 MMbbl/d in 2013, while marketed natural gas production rose from 25.3 trillion cubic feet (Tcf) to 25.7 Tcf, according to the Energy Information Administration.

“The cost per foot among shale wells has declined over 43 percent since 2009, and that drive toward efficiency is helping U.S. energy production to stay competitive in a difficult market,” said Arafa. “Strong domestic production means savings for consumers, greater energy security, and more economic opportunities for workers here in the U.S.”

API’s 2013 Joint Association Survey on Drilling Costs is available through API’s primary distributor, IHS. If you would like to purchase this report, please contact IHS at 1-800-854-7179, or visit their website at www.global.ihs.com.

API is the only national trade association representing all facets of the oil and natural gas industry, which supports 9.8 million U.S. jobs and 8 percent of the U.S. economy. API’s more than 625 members include large integrated companies, as well as exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms. They provide most of the nation’s energy and are backed by a growing grassroots movement of more than 20 million Americans.
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