US Land Drilling to Increase 19.9% in 2022
US land oil & gas operators report plans to drill 19.9% more wells in 2022 versus 2021 and Canadian oil & gas operators to report plans to drill 33.6% more wells.
Oil and gas operators worldwide report plans to increase the number of wells drilled in 2022 by 14.2% in response to growing demand and improved oil prices. This increase in planned drilling activity follows what was an unprecedented industry decline due to the coronavirus demand destruction in 2020 and 2021 and the Saudi Arabia/Russia oil price war initiated in early March 2020.
Regional variances are observed with US land operators projecting to drill 19.9% more wells in 2022 versus 2021 while Gulf of Mexico operators report a planned increase of 15%, international land operators at 9.8%, international offshore operators at 12.7%, and Canadian operators reporting the largest planned increase at 33.6% more wells to be drilled.
Kimberlite Oilfield Research recently updated the 2022 drilling forecast based on interviews with 308 respondents from 196 E&P operators worldwide.
Operator sentiment worldwide has rebounded to a very strong 71.5 after having fallen to a historic low of 19.0 in July 2020.60% of North American land operators and 51% of international land operators report plans to increase drilling expenditures in 2022. The sharp increase in operator sentiment has resulted in the US land rig count improving from a low of nearly 176 drilling rigs operating at the trough of the pandemic led market correction to the current level of approximately 484 drilling rigs. Operator budget discipline along with drilling and completion efficiencies will keep activity levels in 2022 below that observed in 2019 prior to the pandemic-led market decline.
While many uncertainties remain in the market, most operators are optimistic that 2022 and subsequent years will bring improved market conditions to support an increase in global drilling activity after two years of declining and under-investment in the industry. Oil and gas demand is expected to continue to increase over the next ten years and additional investment in the industry will be required to meet the global demand.
Kimberlite will continue to track 2022 plans among the E&P operators worldwide and report updates. Feel free to reach out to discuss.