Reported permitting activity in the gassy Haynesville and Utica shales climbed in February, but Wyoming permitting decelerated significantly, and activity in the Marcellus Shale also declined, according to Evercore ISI.
Analyst James West and his team compile a monthly tally of oil and gas permit data from the major producing states and the Department of Interior's Bureau of Ocean Energy Management (BOEM). Most onshore permits are issued several months before drilling begins, while BOEM’s offshore permits often are secured even further in advance.
Permitting was varied in February across the Lower 48, while Gulf of Mexico (GOM) activity slowed. During the first week of March, a total of 1,298 onshore permits and one GOM plan were issued, Evercore noted.
During February, Permian Basin permitting remained strong, with activity in West Texas and southeastern New Mexico collectively up 101 month/month to 804. Drilling activity, however, trended down across the basin in February, as horizontal rigs fell to 425, off nine month/month. Operators also dropped three nonhorizontal rigs to end at 43.
The Haynesville Shale, which produces mostly natural gas, posted a rebound in permit activity for the second month of the year to 115, up 36 from January. More permits were filed to work in northern Louisiana, Evercore noted. In parallel, the Utica showed an uptick to 55, an increase of 35 month/month.
“Conversely, the Marcellus was impacted due to a void in permitting activity in New York and a slowdown in Pennsylvania, down to 111,” which was off 34 permits from January. The decline partially was offset in West Virginia, where 57 permits were filed in February, 21 more than in the previous month.
February also marked the first month “where Wyoming showed a downward trend preceded by six months of continued increases,” West said. Permits fell 59% from January to 1,733. “The third week was the weakest in February and the lowest over the past three months.”
Softer permitting also was recorded in Colorado, a deteriorating trend since December, with permits declining to 174 in February, down 36 month/month. The Denver-Julesburg/Niobrara witnessed an overall permit reduction, but “the size of the rig fleet remained virtually flat at 30,” West said.
Activity in North Dakota within the Williston Basin increased in February for the third consecutive month to 120 permits, up 10 from January. Montana, which began to see a dip in permitting in November, only had three permits for February, down by two from January.
In the GOM, new well permits in February “experienced a sharp decline in midwater and shallow water,” and no ultra-deepwater permits were filed. Sidetrack-approved projects “posted the most positive change,” up by three, on more midwater and shallow water permits.
One deepwater permit, a 5,000-foot project filed by Anadarko Petroleum Corp., was filed in February, according to Evercore.