An oil well is a hole drilled into the earth to reach underground reservoirs of crude oil, allowing it to be brought to the surface for processing. Wells range from a few hundred feet deep in shallow formations to over 20,000 feet in deep offshore environments. Some produce for decades: a completed well can remain active for 50 years or more, though its output gradually declines over time.
How an Oil Well Is Built
Creating an oil well follows a rough sequence: site preparation, drilling, casing, completion, and production. It starts with clearing and leveling the ground, then setting up a drilling rig that bores into the earth while feeding steel pipe into the hole. During drilling, a specialized fluid called drilling mud circulates through the well. It manages pressure deep underground, carries information about the rock layers being penetrated, and keeps the drill bit cool enough to function.
Safety equipment called a blowout preventer sits at the wellhead to keep oil and gas from surging uncontrollably to the surface if unexpected high-pressure zones are hit. Once the drill reaches the target depth, the well enters the completion phase, a process that typically takes one to five weeks. During completion, the steel pipe lining the well is perforated at the depth of the oil reservoir, creating a connection between the rock holding the oil and the inside of the well. A set of heavy-duty valves known as a Christmas tree is installed at the top to control the flow of oil once production begins.
What’s Inside the Well
An oil well isn’t just a single pipe. It’s a series of nested steel tubes, each with a different job. The outermost layer is surface casing, typically set between 500 and 1,000 feet deep. This casing prevents the wellbore from caving in, protects shallow freshwater zones from contamination, and provides structural support for the blowout preventer at the surface.
Deeper down, additional casing strings line the well to isolate different geological layers and maintain pressure control. At the center of all this sits the production tubing, a narrower pipe through which oil, gas, and water actually flow up from the reservoir. Production tubing also shields the surrounding casing from the corrosive fluids coming out of the formation, extending the well’s useful life.
Conventional vs. Unconventional Wells
The simplest type is a conventional well: a vertical hole drilled straight down into a porous rock formation where oil flows relatively freely. These wells need minimal stimulation to produce because the reservoir rock has enough natural permeability for oil to seep into the wellbore on its own.
Unconventional wells target rock formations where the oil is trapped in very tight, low-permeability stone. A vertical hole alone can’t extract enough to be worthwhile. Instead, the drill turns horizontally once it reaches the target layer, running sideways through the formation for thousands of feet. The horizontal section is then fractured in multiple stages using high-pressure fluid (hydraulic fracturing) to crack the rock open and release the oil. This combination of horizontal drilling and fracturing has unlocked enormous reserves, particularly in shale formations, that were previously considered unrecoverable.
How Oil Reaches the Surface
When a well is first completed, natural underground pressure often pushes oil up through the tubing without any mechanical help. This is the cheapest and simplest phase of production. Over time, though, that reservoir pressure drops, and the well needs assistance.
The most recognizable solution is the pumpjack, the rocking horse-shaped machine visible across oil fields worldwide. A pumpjack drives a pump buried deep in the well that mechanically lifts fluid to the surface. Another common method is gas lift, where gas is injected into the well to lighten the column of fluid, making it easier for reservoir pressure to push oil upward. Gas lift can be remarkably effective. Historical field data showed wells producing 300 to 400 barrels per day jumping to over 1,000 barrels daily after switching to gas lift. Modern operations often combine these approaches in hybrid systems tailored to a well’s specific conditions.
Offshore Oil Wells
Wells drilled under the ocean floor require specialized structures to support drilling and production equipment above the water. The type of structure depends primarily on water depth.
- Fixed platforms use a rigid steel frame anchored to the seabed with driven piles, topped with a deck for crew quarters, drilling rigs, and processing equipment. They work in water depths up to about 1,500 feet.
- Compliant towers are narrow, flexible structures on piled foundations designed to sway with ocean forces rather than resist them rigidly. They’re used in depths between 1,000 and 2,000 feet.
- Tension leg platforms float at the surface but are held in place by vertical cables anchored to the seafloor under tension. Larger versions operate in water depths approaching 4,000 feet.
- SPAR platforms use a massive vertical cylinder as a hull, moored to the seafloor with a web of anchor lines. Current technology allows them to operate in depths up to 7,500 feet.
- Subsea systems skip the surface structure entirely. Wellheads and production equipment sit on the ocean floor, connected by pipelines to a distant processing facility. These systems operate in depths beyond 5,000 feet.
Types of Wells by Purpose
Not every well is drilled to produce oil. Exploratory wells (sometimes called wildcats) are drilled to determine whether oil exists in a particular area. If the results are promising, appraisal wells follow to estimate the size and viability of the reservoir. Development wells are the production workhorses, drilled in proven areas to extract oil commercially.
Injection wells serve a completely different function. Rather than pulling fluid out, they push fluid in. In oil production, Class II injection wells (as classified by the EPA) are used exclusively for fluids associated with oil and gas operations. Operators pump water or gas back into a reservoir to maintain pressure and push remaining oil toward nearby production wells, a process called enhanced recovery. Other classes of injection wells handle industrial waste disposal or, more recently, long-term storage of carbon dioxide underground.
The U.S. Rig Count Today
The number of active drilling rigs in the U.S. Lower 48 states has been falling steadily, from a recent peak of 750 rigs in December 2022 to 517 rigs as of October 2025. Oil-directed rigs dropped 33% over that period to 397, while natural gas rigs fell 23% to 120. Despite the decline, production hasn’t followed the same trajectory. The Permian Basin in West Texas and New Mexico remains the largest U.S. crude oil producing region, continuing to grow output even as its rig count fell 29%. The explanation is efficiency: modern rigs drill faster, horizontal wells reach more reservoir rock per well, and completion techniques extract more oil from each foot drilled.
What Happens When a Well Runs Dry
Every oil well eventually stops being economically viable. When that happens, the well must be properly sealed and the site restored, a process called decommissioning. For onshore wells, this means filling the wellbore with cement plugs at multiple depths to prevent any fluid from migrating between underground layers or reaching the surface.
Offshore decommissioning is more complex and more regulated. When a company signs a lease for offshore drilling, the agreement already includes obligations for decommissioning. The Bureau of Safety and Environmental Enforcement requires operators to plug the well, remove the platform superstructure, and sever the substructure at least 15 feet below the ocean floor’s mudline. The removed steel is typically brought to shore and sold as scrap or refurbished for use elsewhere. Platforms left sitting idle, sometimes called “idle iron,” pose environmental and safety hazards from corroding equipment, wiring, and tanks on the seafloor. Operators generally have one year after a lease ends to complete removal.
There is one notable exception: regulators can approve converting a retired platform into an artificial reef. If the structure meets the requirements of the National Artificial Reef Plan, it may be partially removed or toppled in place, giving marine life a permanent habitat on what was once an industrial site.