U.S. oil and natural gas drilling activity dropped 22 percent from a year ago in the first quarter of 2009, reaching levels not seen since 2004, the American Petroleum Institute said Wednesday.

About 11,071 oil and natural gas wells and dry holes were completed during the first three months of the year, a decline of 35 percent compared with the fourth quarter of 2008.

This is the end to six consecutive years of first-quarter growth, the API said.

The lower U.S. drilling activity indicates that the exploration and production sector is not immune to the current economic downturn, and that they, like most industries, are facing tough business choices, said Hazem Arafa, director of API's statistics department.

API estimated that the drilling total for the first quarter of 2009 was 64.5 million feet, down 30 percent from the first quarter of 2008.

Estimated development oil well footage drilled dropped 22 percent from 2008's first quarter, while estimated gas well footage drilled plunged 42 percent, API reported.

Natural gas -which is the main target for drilling in the country- with an estimated 5,735 natural gas wells completed in the first quarter of 2009, was down 23 percent from the first quarter of the year-ago period, representing the most severe quarterly decline for natural gas plays in this decade, the institution said.

Energy