New data from the American Petroleum Institute shows what those in the field have suspected for several weeks: US oil and natural gas drilling has dropped to levels not seen since 2004, ending six consecutive years of first quarter growth.
Drilling rates have worsened since the combination of economic downturn, plunging commodity prices and the credit crisis make it difficult for the small drillers who account for much of US oil and gas production to continue producing.
According to the Institute, 11,071 oil wells, natural gas wells and dry holes were competed in the first quarter of 2009, down 22 per cent from the year-earlier quarter and down 35 per cent from the fourth quarter of 2008 as the economic downturn hit the energy sector.
Natural gas, the primary target of domestic drilling, with an estimated 5,735 natural gas wells completed in the first quarter of 2009, was 23 per cent lower than the year-earlier quarter, representing the most severe quarterly decline for natural gas plays in this decade.
The industry has to hope that is as bad as it gets.