Segment Focus
Exploration & Production
2014 First Quarter
In 2014, oil and gas exploration & production activities in the US are expected to generate $407.7 billion in revenue.1 This represents a 3.6% increase from 2013 and a 45.1% increase from 2009’s nadir. Industry revenues peaked in 2008 due to record-high oil prices, but declined precipitously in 2009 as prices dropped, driven by declining energy demand resulting from lower levels of economic activity during the recession. Industry revenues have generally increased since that time as the economy and oil prices recovered. Hydraulic fracturing and horizontal drilling practices, coupled with higher oil prices, have allowed exploration & production companies to profitably operate in areas which were previously not economically viable. There is currently little regulation of hydraulic fracturing, but a series of environmental and health concerns, primarily related to groundwater contamination and induced seismic activity, will likely lead to increased regulation. A report by the Environmental Protection Agency regarding the impact of hydraulic fracturing on drinking water resources is expected to be released for public comment and peer review later in 2014.
Industry revenues, as estimated by IBISWorld, are expected to rise over the next several years due to increases in global energy demand and the continued growth of domestic drilling activity.
