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API: Investment in U.S. Shale Well Drilling Surged in 2011

An estimated $65.5 billion was invested drilling an estimated 10,173 U.S. shale oil and natural gas wells in 2011, according to API’s 2011 Joint Association Survey on Drilling Costs. The investment number represents an 87.6% increase in shale drilling expenditures from 2010 levels and more than half of an estimated $124.8 billion spent on all new wells drilled in 2011. The number of estimated shale wells drilled in 2011 is 43.8% more than in 2010.

“The rising numbers illustrate the growing importance of shale drilling in U.S. oil and natural gas development,” said API Statistics Director Hazem Arafa. “Shale drilling drove most of the overall increase in drilling and now accounts for an estimated 23% of all wells drilled in the United States.”

The report shows that while expenditures on shale drilling were barely more than one-fourth of expenditures for drilling all wells in 2009, they accounted for more than half of total well drilling expenditures in 2011.

Estimated expenditures for offshore drilling dipped precipitously from 2009 to 2010, from an estimated $24.9 billion to $4.0 billion, a reflection at least in part of the drilling moratorium put in place by the administration following the Deepwater Horizon accident. Expenditures increased to an estimated $8.1 billion in 2011.

The number of estimated shale wells has risen rapidly, from 5,531 in 2009 to 7,077 in 2010 to 10,173 in 2011. Almost twice as many shale gas as shale oil wells were drilled in 2011, the report estimates, 6,759 versus 3,414.

Wells drilled of all kinds totaled 44,160 in 2011 with a total expenditure of $124,794,493,000 the report estimates.  

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