SIC 1381 Drilling Oil and Gas Wells

Extract

---

SIC 1381 Drilling Oil and Gas Wells

SIC 1381

This category includes establishments primarily engaged in drilling wells for oil and gas field operations for others on a contract or fee basis. This industry includes contractors that specialize in spudding, drilling, redrilling, and directional drilling.

NAICS CODE(S)

213111

Drilling Oil and Gas Wells

INDUSTRY SNAPSHOT

Oil and natural gas drilling is expected to be a growing industry during the 2000s. In the late 1990s, worldwide production increases led to a glut of oil and natural gas on the market, which resulted in price declines. Consequently, many wells were idled. In the early 2000s, with demand once again pushing supply, drilling companies were undertaking new drilling opportunities as well as refurbishing idled drills to get them running again.

Drilling is an inherently volatile business that follows trends in the overall worldwide oil and natural gas markets. Rising oil and gas prices in 2001 led to nearly 1,300 active wells, the highest count since 1986. Within the following nine months, well activity plummeted 43 percent, to 743 active wells in April 2002. By mid-2003, active well totals approached 850. Because 80 percent of all U.S. drilling is related to natural gas, natural gas prices are expected to dictate drilling activity, which is primarily inland based.

During 2004, rising oil and natural gas prices led to the total number of active wells reaching 1,032. The surge in natural gas prompted the federal government to issue 6,000 oil and gas permits, which was 59 percent higher than 2003. That led to a 40 percent increase of gas extracted from federal lands, or 3.1 trillion cubic feet. That trend continued into 2005 with 1,327 active wells reported by the American Petroleum Institute in March of 2005. That number increased slightly to 1,348 by April 15, 2005, up from 1,150 active wells during the same time the prior year. I...

See the full content of this document

---