The number of new oil and gas wells being drilled in the North Sea has crashed to levels not seen since the basin was first tapped more than half a century ago.

The UK’s oil and gas industry warned that the record low was a cause for “serious concern” and left the sector at a crossroads.

Just four exploratory wells have been drilled in the first eight months of the year, with the most optimistic projections pointing to a total of 12 expected by the year end.

That would put 2018 on a par with 1965, the second year that the modern era of exploratory work got under way in the North Sea and when the Beatles were dominating the UK singles charts.

“Record low drilling activity, coupled with the supply chain squeeze, threaten industry’s ability to effectively service an increase in activity and maximise economic recovery,” said Deirdre Michie, chief executive of Oil & Gas UK, which published the figures.

The fall was a sign that companies were choosing to drill “only the most competitive and profitable” wells, said Ross Dornan, market intelligence manager at the trade body.

The industry warned againsta tax grab in the budget, a prospect that has been raised recently. High oil prices mean the sector is set to generate £10bn in free cash flow this year, a level not seen since 2010, but the Treasury’s take is expected to be down a quarter on 2010, because of tax changes.

Dornan said Treasury ministers had reassured him that the government was “committed to fiscal stability.” He added: “Industry and the Treasury can’t be complacent in this area.”

There are also fears over the impact of a no-deal Brexit on the industry’s 280,000 workers, which is expected to add £500m to the sector’s costs.

“We may have to be realistic about what can be achieved,” Dornan said of the oil industry’s hopes for Brexit.