First-quarter US drilling plunges to 2004 levels, API reports

US oil and gas drilling during the first quarter dipped to levels not seen since 2004, ending six consecutive years of year-to-year growth for the period, the American Petroleum Institute said on Apr. 15.

An estimated 11,071 oil wells, gas wells and dry holes were completed in 2009's first three months, 22% less than in 2008's first quarter and 35% lower than the total for 2008's final quarter, API said in its latest quarterly well completion report.

"The lower US drilling activity indicates that the exploration and production sector is not immune to the current economic downturn and that they, like most industries, are facing tough business choices," said Hazem Arafa, director of API's statistics department.

He said that the estimated number of new exploratory wells fell 11% from 2008's first quarter, while the estimated number of deep wells (those 15,000 feet or deeper) and shallow gas wells slipped 13% and 36%, respectively, year-to-year.

API estimates show that the resurgence of oil well completions which began earlier in the decade subsided this past quarter as the total fell 23% from a year earlier to 4,060 wells. Overall, estimated oil well completions share of total drilling activity in the past three months was 36%, down from 40% a year earlier, it said.

It said that gas continues to be the primary domestic drilling target, with an estimated 5,735 wells completed during 2009's first quarter. This was still 23% lower than the total for the comparable 2008 period and represents the most several quarterly decline for gas plays this decade, according to API.

Total estimated footage drilled during the first quarter reached 64.5 million feet, 30% less than in 2008's first three months. Total developmental oil well footage dropped 22% year-to-year while estimated gas well footage fell 42%, API said.

Contact Nick Snow at [email protected]