Oil-Drilling Boom Under Way

Oil-drilling activity in the U.S. has accelerated to a pace not seen in a generation as energy companies, oilfield contractors and landowners rush to exploit newly profitable sources of crude. The number of rigs aiming for oil in the U.S. is the highest since at least 1987, according to Baker Hughes Inc. The 818 rigs tallied by the oilfield-service company last week are nearly double last year's count and about 10 times the number that were drilling for oil in the late 1990s. While the drilling surge is unlikely to yield enough crude to alter the global oil-supply picture, analysts say the new activity, centered on so-called unconventional reservoirs, could greatly boost domestic oil production and help offset declining output in Alaska and the Gulf of Mexico. These reservoirs, trapped in tight shale-rock formations, were deemed too hard to crack a decade ago. But in the past two years, breakthroughs in drilling technology, combined with the resilience of high oil prices, have led companies like Chesapeake Energy Corp. and Petrohawk Energy Corp. to switch rigs formerly devoted to drilling for natural gas to emerging oilfields like the Eagle Ford shale formation, which stretches from the outskirts of Houston and San Antonio, Texas, south into Mexico...more