According to the latest mid-year forecast assembled by World Oil magazine, only 14,430 wells will be drilled in the US this year, on par with the years 1930-34, when not a single year topped 20,000 wells drilled. In fact, this will be the lowest total since 11,700 wells were drilled in 1933.
World Oil has surveyed oil and gas companies and state agencies, as part of the process to arrive at its exploration and production forecast. The global oil and gas publication, which celebrated its 100th anniversary this year, has been conducting this survey and forecasting US drilling activity for the last 90 years.
Back in January, it had forecast 19,179 wells for 2016. However, the drop in crude price and the corresponding drop in rig count to an all-time low of 404 on May 20 have led activity downward through the first half of the year.
Thus, on a year-to-year basis, US drilling will plummet 50% to 14,430 wells in 2016 from 28,842 in 2015. The 2015 total represented a roughly 40% drop from 2014's level.
Kurt Abraham, editor and chief forecaster for World Oil, notes that activity in the second half of 2016 will show an increase of 13% over the first half of the year, pointing toward a trend that should continue.
"We believe that with some price stability, the E&P market in the US will show steady improvement, though from a very low base of activity," said Abraham. "Our survey indicates that large operators are very conservative about future investment in drilling programs. Smaller firms will be more active in the second half of the year."
Looking at second-half vs. first-half activity in some key states, drilling should rise 8.9% in Texas; improve 16.4% in Oklahoma; jump 50.3% in Louisiana (after a very slow first half); increase 12.1% in Colorado; gain 15.2% in Pennsylvania; and pick up 29.3% in Kansas.
