API Report: U.S. Energy Revolution Gathers Momentum

An estimated $153.7 billion was invested in drilling approximately 46,736 oil and natural gas wells in 2012, according to API’s 2012 Joint Association Survey on Drilling Costs. The investment represents a 23.1 percent increase over 2011 levels.

“The U.S. oil and natural gas revolution is gathering momentum, as companies invest more into domestic production and expand our ability to supply America’s energy needs,” said API Statistics Director Hazem Arafa. “Companies are opening more oil and gas wells, with a rising share of new investment devoted to exploration and production of oil, both onshore and offshore.”

The total number of new wells increased by 5.8 percent from 2011 levels. Expenditures on oil represented 61.1 percent of all drilling costs in 2012, up from 49.3 percent in 2011. Gas expenditures accounted for 30.7 percent of costs, down from 44.2 percent in 2011.

“Natural gas production remains at historic highs, but we’re seeing that new production is following the market, where the demand for oil is driving growth,” said Arafa. “Each dollar spent means more jobs, more production, and more abundant energy to fuel America’s manufacturing and economic renaissance.”

The report also shows that expenditures on shale drilling represented 34.6 percent of costs, down from 52.5 percent in 2011. Most of the decline occurred in natural gas drilling, while the number of new shale oil wells increased from 3,414 in 2011 to 3,619 in 2012. Overall investment in offshore production also increased from 6.5 percent of all domestic oil and gas production expenditures in 2011 to 7.1 percent in 2012.

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LNG World News Staff, December 24, 2013