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Exploration and development of U.S. oil and gas fields, 1955-2002

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  • Boyce, John R.
  • Nøstbakken, Linda

Abstract

We study the exploration and development of oil and gas fields in the U.S. over the period 1955-2002. We make four contributions to explain the economic evolution of the oil and gas industry during this period. First, we derive a testable model of the dynamics of competitive oil and gas field exploration and development. Second, we show how to empirically distinguish Hotelling scarcity effects from effects due to technological change. Third, we test these hypotheses using statewide panel data of exploration and development drilling. We find that the time paths of exploration, development and total wells drilled are dominated by Hotelling scarcity effects. Finally, we offer an explanation for why fixed costs from exploration can make the contracting equilibrium in the mineral rights market efficient.

Suggested Citation

  • Boyce, John R. & Nøstbakken, Linda, 2011. "Exploration and development of U.S. oil and gas fields, 1955-2002," Journal of Economic Dynamics and Control, Elsevier, vol. 35(6), pages 891-908, June.
  • Handle: RePEc:eee:dyncon:v:35:y:2011:i:6:p:891-908
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    References listed on IDEAS

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    Cited by:

    1. Osmundsen, Petter & Rosendahl, Knut Einar & Skjerpen, Terje, 2012. "Understanding Rig Rates," UiS Working Papers in Economics and Finance 2012/9, University of Stavanger.
    2. John R. Boyce & David M. Bruner, 2009. "Good Fences Make Good Neighbors: Endogenous Property Rights in a Game of Conflict," Working Papers 09-05, Department of Economics, Appalachian State University.
    3. John Boyce & David Bruner, 2012. "Property rights out of anarchy? The Demsetz hypothesis in a game of conflict," Economics of Governance, Springer, vol. 13(2), pages 95-120, June.
    4. Terje Skjerpen & Halvor Briseid Storrøsten & Knut Einar Rosendahl & Petter Osmundsen, 2015. "Modelling and forecasting rig rates on the Norwegian Continental Shelf," Discussion Papers 832, Statistics Norway, Research Department.
    5. Sabet, Amir H. & Heaney, Richard, 2015. "Bid-ask spread, information asymmetry and acquisition of oil and gas assets," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 37(C), pages 77-84.
    6. Osmundsen, Petter & Rosendahl, Knut Einar & Skjerpen, Terje, 2015. "Understanding rig rate formation in the Gulf of Mexico," Energy Economics, Elsevier, vol. 49(C), pages 430-439.

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