Spending On US Oil And Gas Reserves Tops $185 Billion

Photo by Dave Fehling
Spending by U.S. oil and gas producers to find and develop new supplies rose 20% last year compared to 2011. That's according to a study released by the Houston office of Ernst & Young.

The fifty largest oil and gas companies operating in the U.S. spent close to $186 billion in 2012 on exploration and production. That’s the biggest capital expenditure since Ernst & Young began tracking U.S. oil and gas reserves five years ago.

The study attributes the jump to increased spending on finding and developing tight oil formations and natural gas liquids.

Marcela Donadio is Americas Oil and Gas leader for Ernst & Young.

“The fact that capital expenditures are very, very high are reflective on increased jobs in the Houston area. The influx of people that are coming in, in some ways it reminds me a little bit about all of the energy activity in the late ’70s and early ’80s.”

The spending came despite a nearly 60% drop in energy producers’ after-tax profits, driven largely by low natural gas prices.

Bio photo of Andrew Schneider

Andrew Schneider

Business Reporter

Andrew Schneider joined KUHF in January 2011, after more than a decade as a print reporter for The Kiplinger Letter...