Total domestic footage drilled set first quarter record, API says

April 25, 2008
Domestic oil and gas drilling activity continued to increase during 2008's first three months, the American Petroleum Institute said in its latest quarterly well completion report. Separately, the Federal Reserve Bank of Dallas said that the number of rigs working matches the highest number operating in the current drilling expansion.

Domestic oil and gas drilling activity continued to increase during 2008's first three months, the American Petroleum Institute said in its latest quarterly well completion report. Footage rose 1% from a year earlier to an estimated 79,804,000 feet, a first-quarter record, it said on Apr. 18.

Separately, the Federal Reserve Bank of Dallas said that the number of rigs working matches the highest number operating in the current drilling expansion. "Oil service companies report that nothing fundamental has changed and that the additional rigs reflect strength in shale and unconventional gas," it said in its Houston Economic Update for April, which came out the same day.

An estimated 13,497 oil wells, natural gas wells and dry holes were sunk during the period, 4% more than the total for 2007's first quarter, API said. Oil well completions climbed 12% year-to-year to an estimated 4,577, their highest first-quarter total since 1986, according to the report.

Natural gas remained the primary domestic drilling target, with an estimated 7,549 completions during the first quarter. That was 1% less than the total for the same period a year earlier but still nearly double the activity of a decade earlier, API said.

Exploratory well completions, which accounted for nearly 15% of the total activity, climbed 37% year-to-year, with the number of domestic exploratory gas wells drilled increasing 60% during the period, it continued.

The Dallas Fed noted that crude oil prices passed $100/bbl in late February and have stayed in a $100-110/bbl range since, more than 80% above their level in the comparable 2007 period. Natural gas prices followed, increasing from $8 per thousand cubic feet to nearly $10/Mcf, it said.

Gas production has been reported 8% higher year-to-year and the increased supplies have created a debate over the fuel's prospects, the Dallas Fed's HEU continued. "While pessimists point to the level and success of drilling, optimists point out that inventories have moved back into the normal range, Canadian production is now falling, liquefied natural gas imports have not come into the US at the pace expected, and the current ratio of oil to gas prices favors substitution of gas for oil wherever possible. Weather is always the wild card," it said.

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