U. S. drilling recovery possible as oil prices firm

Steady oil prices raise hopes for a second half recovery from record low drilling levels in the US earlier in the year. Natural gas prices firmed this spring after a dismal low in February and were strong in July. Gas drilling is picking up in anticipation of expiration at yearend of federal tax credits for production from low permeability reservoirs. This paper reports that wellhead revenues will total $77.8 billion for the year, 5% more than in 1991. But operators may reinvest only 10.5% of that, down from an estimated 13.5% in 1991. Here is an updated look at 1992 US drilling with less than half the year remaining: Operators will drill 23,630 oil wells, gas wells, and dry holes, down from an estimated 28,778 drilled in 1991. Exploratory drilling will drop to 4,896 wildcats. The rotary rig count will average 695, down 19% from the 1991 average. Total footage drilled will exceed 152 million ft of hole, and well depth will average 4,950 ft.