Oil and gas producers spent an estimated $153.7 billion to drill US wells in 2012, 23.1% more than in 2011, the American Petroleum Institute said in its latest Joint Association Survey of Drilling Costs.
“The US 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,” API Statistics Director Hazem Arafa said. “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.”
He said the total number of new wells increased by 5.8% to 46,736 from 2011 levels. Expenditures on oil represented 61.1% of all drilling costs in 2012, up from 49.3% in 2011. Gas well spending accounted for 30.7% of costs, down from 44.2% the previous year, he added.
“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,” Arafa observed.
The report also showed that expenditures on shale drilling represented 34.6% of total costs, down from 52.5% in 2011. Most of the decline was in gas well drilling, while the number of new shale oil wells rose from 3,414 in 2011 to 3,619 in 2012.
Overall investment in offshore production also increased from 6.5% of all US oil and gas production expenditures in 2011 to 7.1% in 2012, Arafa said.
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