Natural gas drilling has been the dominant energy story in the U.S. for the past few years, but oil is back with a vengeance.But:
For the first time in 18 years, the number of oil rigs working in the U.S. has exceeded the number of natural gas rigs, according to July rig data compiled by IHS-CERA, covering both land and offshore rigs.
By 2020 this surge in oil drilling could increase U.S. oil production by as much as 3 million barrels per day, Peter Stark, head of IHS-CERA's industry relations said Wednesday during a session launching the start of Summer NAPE, the semi-annual oil and gas prospects expo being held in Houston.
The surge could slow if natural gas prices continue to rise and make gas projects more attractive -- which many analysts expect in the next year.And this is why I commented on another post why it concerns me that a well in the Bakken can now cost $9 million:
In some cases drilling for oil can cost less than for gas. Tom Ward, CEO of SandRidge Energy, said his company is spending as little as $760,000 per well in the Central Basin field in the Permian, compared to several million per well in most shale gas fields.
John Christmann, head of Apache Corp.'s Permian Basin operations, said his company has acquired acreage in the Empire ABO field in the Permian, a field where no new wells have been drilled since 1984.
"In some cases you have million-barrel wells that have never had an offset drilled near them," Christmann said, seeing strong potential for large quantities of oil.