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How efficiently has American drilling matured?

How can we measure well efficiency from year to year? Well just recently, the American Petroleum Institute (API) initiated a survey that aimed to find out how efficient wells have become over the course of America’s energy revolution.

According to the API’s 2013 Joint Association Survey on Drilling Costs, an estimated $147.7 billion was invested in drilling roughly 45,000 U.S. oil and natural gas wells in 2013. This number is a slight decrease from wells drilled in 2012. All the while, costs remained flat, but the average depth and total distance drilled increased, indicating a rise in efficiency.

“Even before the recent decline in oil prices, developers focused on maximizing each well, reducing the costs and surface footprint of energy production,” said API Statistics Director Hazem Arafa in an official statement. “The well count didn’t rise, but the wells are getting deeper and more efficient. As a result, the U.S. is improving its ability to remain a competitive energy superpower, creating jobs and fueling economic growth.”

In related news, The rig count misnomer?

The study found that new wells declined from an estimated 46,548 to 45,039. In contrast, the average well depth increased from approximately 7,981 feet to 8,491 feet and the total well footage (horizontal and vertical distance drilled) grew from an estimated 365.9 million feet to 368.1 million feet. Additionally, demand for oil outpaced demand for gas, with oil wells accounting for 65.1 percent of expenditures in 2013. The survey also found that roughly 30 percent of shale wells surveyed increased in total footage an estimated 190.9 million feet from 188.8 million feet.

The Energy Information Administration found that over the same time period of 2012 to 2013, U.S. crude oil production increased from an average of 6.5 million barrels per day (MMbbl/d) in 2012 to an average of 7.5 MMbbl/d in 2013. Natural gas production also saw a significant rise, increasing from 25.3 trillion cubic feet (Tcf) in 2012 to 25.7 Tcf in 2013. So what’s the short and skinny of this information? American producers are real good at what they do and with low commodity prices, are able to do more with less.

“The cost per foot among shale wells has declined over 43 percent since 2009, and that drive toward efficiency is helping U.S. energy production to stay competitive in a difficult market,” said Arafa. “Strong domestic production means savings for consumers, greater energy security, and more economic opportunities for workers here in the U.S.”

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