First Quarter 2009 US Drilling Activity Dips to 2004 Levels

First-quarter U.S. oil and natural gas drilling activity dipped to levels not seen since 2004, marking the end of six consecutive years of first-quarter growth, new estimates from the American Petroleum Institute show.

According to API's 2009 Quarterly Well Completion Report: First Quarter, an estimated 11,071 oil wells, natural gas wells and dry holes were completed in the first quarter of 2009, down 22 percent from 2008's first quarter and down 35 percent from 2008's fourth quarter.

"The lower U.S. 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. The estimated number of new exploratory wells -- drilled for the purposes of discovering new reserves in unproven areas -- fell 11 percent from the first-quarter of 2008, while the estimated number of deep wells (15,000 feet or deeper) and shallow gas wells slipped 13 percent and 36 percent, respectively, from last year's first quarter, Arafa said.

API estimates show that the resurgence in oil well completion activity that began earlier in the decade subsided in the first quarter of 2009, with total estimated oil well completions falling 23 percent from the same quarter a year ago to4,060 wells. Overall, estimated oil well completions' share of total drilling activity in the first quarter of 2009 was 36 percent, down from 40 percent in the first quarter of 2008.

Natural gas continues to be the primary target for domestic drilling, with an estimated 5,735 natural gas wells completed in the first quarter of 2009. Still, this was 23 percent lower than 2008’s first quarter, and represents the most severe quarterly decline for natural gas plays in this decade.

API also reported total estimated footage of 64.5 million feet drilled in the first quarter of 2009, a 30 percent decrease from first quarter 2008. Estimated development oil well footage drilled dropped 22 percent from 2008’s first quarter, while estimated gas well footage drilled plunged 42 percent.