Today’s efficiency gains, especially those driven by 20 to 30 percent discounts off the cost of oil field tools and services, could be short lived if drilling rigs ride high again after the end of the downturn, which will come sooner or later.
DENVER — The ground around a northern Colorado wastewater injection well has been relatively quiet for more than two months, offering hope that a 10-month string of more than 200 small earthquakes might have subsided.
A natural gas extraction company controlled by energy giant Exxon Mobil sought to prove Wednesday that it is not to blame for a recent rash of small earthquakes in North Texas, telling a powerful state agency that it believes the earthquakes occurred naturally.
Contacts in the U.S. petroleum business told the Fed the cost of drilling and bringing wells into production have dropped 20 to 30 percent since the beginning of the year, according to the Fed’s June Beige Book, a monthly assessment of economic activity in 12 regional districts across the United States.
In June 2012, when Lance spoke at the last biennial seminar held by the Organization of Petroleum Exporting Countries, the U.S. was pumping 6.2 million barrels a day. Now, it produces 9.5 million barrels at day, the highest since 1972.
A handful of oil companies have sounded off a renewed sense of optimism as U.S. crude has hovered around $60 a barrel, with some saying they have even raised their annual production forecasts, according to Barclays.
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