Drilling Oil & Gas Wells NAICS 213111
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Industry Summary
The 1,508 Drilling contractors in the US provide drilling services under contract to oil and gas producers. Drilling may be land-based (domestic or global) or conducted in shallow or deep water, and each type requires a unique set of capital equipment. Contracts can be for a single well or multiple wells in a geographic location.
Dependence on Third Party Suppliers
Demand among drilling companies for consumable supplies, ancillary rig equipment, and third-party services can exceed local supply and result in increased prices and delivery delays.
Volatile Energy Prices
Demand for drilling is affected by gas and oil prices, which can be highly volatile.
Recent Developments
Oct 23, 2025 - US Oil Drops Below $60 Threshold
- On October 10, the price per barrel of West Texas Intermediate (WTI) crude oil tumbled below the critical $60 mark for the first time since May, with Brent crude oil following suit, closing down 3.82%, OilPrice.com reports. The collapse in the price of oil was the result of a one-two punch: the Israel-Gaza cease fire’s easing of geopolitical risk; and escalating trade tensions between the US and China following new tariff threats on Chinese imports by President Trump that sparked fears a global trade war would severely curtail world economic growth and, consequently, crush oil demand. Oil rallied later in October after the US imposed sanctions on Russian oil producers. According to OilPrice.com, the oil and gas industry's shift towards capital discipline and profitability over growth means oil prices must stay above $70 per barrel for meaningful activity to continue.
- The Trump administration has moved to open 23 million acres of Alaskan Wilderness to drilling by repealing protections imposed by the Biden administration, The New York Times reports. Interior Secretary Doug Burgum said the previous administration exceeded its authority when it banned oil and gas drilling in the area known as the National Petroleum Reserve-Alaska. The petroleum reserve, established over a century ago as an energy warehouse for the US Navy, is estimated to contain more than 8 billion barrels of recoverable oil. The Bureau of Land Management has released a draft environmental assessment to propose reopening up to 82% of the reserve to oil and gas leasing and exploration and development. The proposal comes partly in response to Trump’s January executive order, “Unleashing Alaska’s Extraordinary Resource Potential," the Interior statement said. The area is home to ConocoPhillips’ Willow oil field, approved under Biden.
- A US District Court has ruled the National Marine Fisheries Service’s (NMFS) biological opinion for oil and gas drilling in the Gulf of Mexico fails to protect an endangered species of whale and sturgeon, Oil & Gas Journal reports. The ruling by the US District Court could imperil federal offshore oil and gas leasing drilling in the Gulf, several energy trade association defendants in the case – Sierra Club v. NMFS – said. The court said it would vacate the biological opinion on Dec. 20, 2024, if NMFS fails to complete a new one. Siding with environmental groups, the court challenged the biological opinion, saying it “underestimated the risk and harms of oil spills to protected species” and its jeopardy analysis for two listed species, the Rice’s whale and the Gulf sturgeon. The next federal Gulf of Mexico oil and gas lease sale is scheduled for 2025.
- Producer prices for drilling oil and gas wells services firms fell 1.4% in August compared to a year ago, after falling 1.5% in the previous August-versus-August annual comparison, according to the latest US Bureau of Labor Statistics data. Employment by the industry grew 7.5% year over year in July, while the average industry wage for support activities for oil and gas operations rose 3.6% over the same period to $35.81 per hour, easing from its high in March, BLS data show. In August, the price for one barrel of West Texas Intermediate (WTI) crude oil averaged $64.86, down from $76.68 in August 2024. Low crude prices are a disincentive for drilling activity.
Industry Revenue
Drilling Oil & Gas Wells
Industry Structure
Industry size & Structure
A typical oil and gas drilling company operates from a single location and has annual revenues of $13 million.
- There are about 1,508 firms providing drilling services in the US that employ 53,277 workers and generate $20 billion in annual revenue.
- 81% of firms employ fewer than 20 workers; 6% of firms have 100 or more employees.
- Large drilling firms include: Transocean Ltd., Seadrill Ltd, Helmerich & Payne, Nabors Industries Ltd, and Noble Corporation.
- Major suppliers are oil and gas service companies, such as SLB (aka Schlumberger), Halliburton, and Baker Hughes. They provide pipe, chemicals, drilling mud (drilling fluid), concrete, waste disposal, etc.
- Buyers of a drilling company's services are oil and gas exploration and production companies, such as Exxon-Mobil, Total SA, BP Oil, Chevron, ConocoPhillips, Shell, Range Resources, etc.
- Entry into the business is difficult because drilling rigs are expensive and require highly experienced crews. Production companies prefer to contract with firms that have a proven track record in both operations and safety since penalties for leaks, spills, and environmental breaches can be severe and can result in lost leases.
Industry Forecast
Industry Forecast
Drilling Oil & Gas Wells Industry Growth
Source: Vertical IQ and Inforum
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