It's Not Too Early to Review Drilling Efficiency

The API wants more drilling to take place in federal lands, but oil and gas growth continues nonetheless,

Jan 15, 2014 at 3:00PM

This article was written by Oilprice.com -- the leading provider of energy news in the world

The U.S. oil industry's lobbying group said it wanted greater access to energy reserves for the benefit of the American people. For the industry itself, rigs are more efficient in existing plays and that difference could determine the longevity of U.S. oil production gains.

"America's oil industry expanded drilling in 2013 thanks in large part to access on private and state lands," Hazem Arafa, director of the American Petroleum Institute's statistics department, said in a statement. "Additional access to our own vast energy resources and streamlined federal permitting would allow for more opportunities to produce U.S. energy while creating more American jobs and generating more revenue for our government."

API said the number of oil wells drilled in the United States in 2013 increased from the previous year as the U.S. oil glut continues. That activity helped the United States last year produce an average of 7.5 million barrels per day, a 15% increase from the previous year.

The U.S. Energy Information Administration said in its monthly market report for January oil production growth should come primarily from the Bakken, Eagle Ford and Permian shale basins through 2015. Combined, those three plays made up about 30% of the annual average production rate last year. Though North Dakota production is generating major interest from the press, it's the Permian basin in West Texas and New Mexico that's bullish for energy companies through 2015.

But oil services company Baker Hughes said its well count for the fourth quarter of 2013 increased the most in the Eagle Ford play in Texas. The company said its U.S. onshore well count for the fourth quarter of 2013 was 9,056, down from the third quarter but 5% higher year on year.

"On average, the U.S. onshore rig fleet produced 5.34 new wells during the fourth quarter, representing a 1 percent improvement in drilling efficiencies compared to the third quarter," the company said.

The EIA says it's improved drilling efficiency and well activity, more than anything else, and that's a key driver of the growth in U.S. onshore oil production. That could cast a shadow of doubt over claims by the API that more is an improvement over better. For a company like Halliburton, the high cost of drilling means efficiency is the best strategy for operators.

New drilling technologies used in shale formations in the United States have given energy companies access to oil deposits that were previously out of reach. That, in turn, has led to historic increases in U.S. oil production. The EIA's forecast for 2015, however, was lower than it expected in previous reports, adding to speculation the U.S. oil gains may be short-lived. With energy hawks and policymakers discussing how and where to send U.S. crude, it may be time to put efficiency at the forefront of the debate.

Could this spell the end of OPEC
Imagine a company that rents a very specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock... and join Buffett in his quest for a veritable LANDSLIDE of profits!

 

Related article: Peak Oil becomes an Issue Again after the IEA Revised its Predictions

Related article: 10 Things to Consider about the Marcellus Shale

Written by Daniel J. Graeber at Oilprice.com

The Motley Fool recommends Halliburton. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers