Drilling declines of 20% or more year to year are likely in the US and Canada in 2002.
OGJ forecasts a drop of almost 29% in the US compared with 2001, when operators drilled an estimated 36,990 wells.
The decline in Canada should be substantial but less severe, OGJ reckons.
Elsewhere in the world, overall drilling in January through April 2002 appears to be a near carbon copy of activity in the first 4 months of 2001.
Click here to view Oil & Gas Journal Well Forecast for 2002 pdf
Here are highlights of OGJ's midyear drilling forecast for 2002:
- Operators will drill 26,350 wells in the US this year, a drop of 28.7% from the estimated 26,990 wells drilled in 2001 (OGJ, Jan. 28, 2002, p. 86).
- All operators will drill 3,676 exploratory wells of all types.
- The count of surveyed rotary rigs compiled by Baker Hughes Inc. will average 850/week this year vs. 1,155/week in 2001.
- Operators will drill more than 14,000 wells in western Canada, down from more than 18,000 drilled there last year.
US drilling
Despite receiving approval for large numbers of drilling permits, US operators lagged badly in getting rigs into the field since the first of this year compared with a year ago.
Of the 45 states and districts represented in the Baker Hughes rig count, only seven showed year-to-year increases in 2002 in the first 5 months. They are Alaska, Indiana, Kentucky, New York, Pennsylvania, Texas Dist. 1 (Southwest Texas), and Texas Dist. 9 (North Texas).
OGJ's midyear forecast calls for the drilling this year of almost 6,000 wells in Texas and more than 2,000 each in California, Oklahoma, and Wyoming.
California, Kansas, Louisiana, Southeast New Mexico, Pennsylvania, and West Virginia should host 1,000 or more wells each. Louisiana's total includes 830 wells in the Gulf of Mexico in state and federal waters. The gulf off Texas will host 85 new wells.
The number of US rigs active in the first 5 months of 2002 was 673 land rigs, down 31.7% on the year, and 114 offshore rigs, down 32%, according to Baker Hughes.
Leading into summer, operators were filing even more intents to drill wells.
The number of drilling permits issued for 30 US states as tallied by Lehman Bros. Inc. was 7.2% greater during May than in April, adjusted for a comparable number of filing days (OGJ Online, June 18).
Driving the improvement were month to month increases in Kansas 18%, Kentucky 38%, Michigan 69%, Texas 16%, and West Virginia 36%.
Lehman Bros. said the number of permits issued grew by more than 20% since a trough in March.
Activity in Canada
OGJ's prediction of 14,065 wells for the year in western Canada would be a 22% drop from record drilling in 2001.
Trade statistics show operators drilled 18,174 wells in western Canada last year, compared with a 10-year average of around 11,000 wells.
The most recent forecast by the Petroleum Services Association of Canada called for the drilling of 10,430 wells in Alberta, 660 in British Columbia, and 2,700 in Saskatchewan.
PSAC cited increased cash flow from higher oil and gas prices and lower costs of services and supplies for raising its 2002 forecast by 614 wells in May 2002.
The Baker Hughes rig count averaged 273 rigs/week in Canada through May 31, 2002, 31% lower than in the same period of 2001.
Outside US, Canada
During January through April, world drilling activity outside the US and Canada averaged 733 rigs/month, 5 rigs higher than in the first four months of 2001.
A decline of 15.9% to 221 rigs in the Western Hemisphere offset increases in the other four world regions, Baker Hughes reported. Mexico countered the drop, averaging 62 rigs/month this year.
The Middle East was up 12.7% to 194 rigs/month, Asia-Pacific was up 10.6% to 166 rigs/month, Europe was up 7.8% to 96 rigs/month, and Africa was up 3.7% to 56 rigs/month.
