US energy revolution gains further 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% increase over 2011 levels.

“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,” said Hazem Arafa, API statistics director. “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% from 2011 levels. Expenditures on oil represented 61.1% of all drilling costs in 2012, up from 49.3% in 2011. Gas expenditures accounted for 30.7% of costs, down from 44.2% 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% of costs, down from 52.5% 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. The total investment in offshore production also increased from 6.5% of all domestic oil and gas production expenditures in 2011 to 7.1% in 2012.

API’s 2012 Joint Association Survey on Drilling Costs is available through API’s primary distributor, Information Handling Services (IHS).

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