The oil price collapse of January 1986 caused all oil industry indicators to plummet as the industry entered its worst depression in recent memory. Although much oil field activity was suppressed, those few companies with well-managed sources of cash flow and with little debt took advantage of bargain-price services to continue exploration. As in the last few years, companies adopted conservative tactics to husband their capital. These strategies included low-risk operations such as development drilling or exploratory efforts in the established Miocene and Oligocene trends. Stringent economic criteria forced operators to target wells for shallower, oil-prone objectives, and to spread risk through the formation of partnerships.

Operators drilled 991 wells in onshore south Louisiana in 1986, a decrease of 29% from 1985 and a fall of 37% from the peak year of 1981. Industry drilled 113 wildcats, 136 other exploratory tests, and 742 development wells. Total footage dropped 41% to 8,721,992 ft, and average footage also fell to 8,801 ft/well from 10,575 ft/well in 1985. The industry success rate was 43%, with 13 new fields discovered and 33 significant extensions completed.

Leasing activity in south Louisiana was crippled, with the total amount of leased acreage (268,925 ac) decreasing 56% compared to 1985 and 85% compared to the high in 1981. Allen, St. Bernard, Cameron, Lafourche, Acadia, and Vernon Parishes were the leading lease sites.

Geophysical activity fell 56% from 1985 and declined 74% from peak 1981 levels as 441 crew-weeks of seismic were shot. Interest was heaviest in Vermilion, Calcasieu, Terrebonne, Beauregard, Cameron, and Plaquemines Parishes.