OUTLOOK 2005: United States
Producing Oil Wells

$40 to $50 crude keeps strippers pumping

While the US total number of producing oil wells declined again in 2004, as reported by state agencies and estimated by World Oil, the overall percentage decline was slightly less in 2004, from 2003 numbers, compared to that of 2003 vs. 2002. The percentage drop in 2004 was – 0.6%, or 3,201 wells from a total 512,988 producers in 2003. Texas, with its 151,653 oil wells nearly twice those of the next closest state, was down 1.8%, slightly less than last year. District 8, with over 38,000 producers, and 8A with over 21,000, held nearly steady with their secondary recovery emphasis – District 8, notably claims 2,314 flowing oil wells. District 9, with 21,444 wells likely responded to the high prices by starting up some shut-down pumpers – as did Districts 1, 7B, 7C and 10.

The steady crude price increase through 2004 also helped keep oil wells pumping in Oklahoma, the number two producer, down only 0.4% to 83,750 wells. Kansas kept its 40,500 well count nearly steady by keeping the power to its strippers. Ohio kept 28,941 wells producing with only a 0.2% drop; as did the stripper producers of Kentucky, Pennsylvania and Illinois, with 18,000, 16,200 and 16,900 oil producers, respectively. These relatively shallow oil production areas could see increased drilling for the readily accessible and more valuable crudes. Louisiana kept nearly 20,000 oil wells operating, principally in its northern area, across from Texas District 6.

Farther west, New Mexico is estimated to have kept over 27,000 wells producing, with the majority in the southeast. California actually showed a 1.5% increase in 2004, to 47,065 oil wells, indicating its heavy oil fields were increasingly profitable at higher price levels. In most US areas, as both oil and gas prices increased in 2004, the incentives to drill likely favored gas prospects, as the generally known crude oil areas are basically covered by existing wells.