Oil, Gas Drilling To Hit 20-Year Low -- July 14, 2020

Link here.

The number of drilled wells globally is expected to reach around 55,350 this year, said Rystad Energy, the lowest level since at least the beginning of the century as oil and gas activity, including the drilling market both in terms of wells drilled and related demand for drilling equipment, has been stymied by the COVID-19 pandemic.

The decline is a staggering 23% fall from 2019’s number of 71,946 wells. Rystad Energy’s forecast, which extends to 2025, does not expect last year’s number to be met or exceeded within the considered timeframe.

Drilled wells are expected to partly recover to just above 61,000 in 2021, as governments ease travel restrictions, boosting oil demand and prices. Then numbers will rise further to just above 65,000 in 2022 and remain just below 69,000 until the end of 2025.

North America is likely to be most affected, with the country’s rig count already down to historic lows just a few months into the downturn. Although modest recovery is possible in second-half 2020, drilling activity will remain more than 50% below the levels seen at the same time last year.

It should be remembered that Saudi was feeling the "heat" well before Covid-19 became a thing. Saudi Arabia announced their attempt to "break" shale just before Covid-19 destroyed demand.

Like "types" of oil (heavy, light, sweet, sour), wells are not created equally (off-shore, on-shore, conventional, tight, vertical, horizontal). Nor can we compare production from wells drilled by rigs with 1981 technology with rigs being used in 2021. And so much more. We need better metrics.