A rebound in Permian oil and gas permitting, along with a lift in the Haynesville and Marcellus shales, lifted the Lower 48 count in July to a three-year high, according to state and federal data.

Permian

The “midsummer boost” compiled by Evercore ISI analysts, found that permitting overall rose by 707 month/month (m/m) and was 63% higher year-to-date. Permian permitting increased by 273 from June, up 22%. 

“July’s permitting levels increased from May 2020 (plus 25%) and 2021 (plus 81%), but were still lower from 2017 to 2018 by 22% on average,” the analyst team led by James West noted. Haynesville permitting increased by 137 m/m, or 54%, while Marcellus had 132 more permits than in June, or up 111%. Permitting in the “smaller plays” rose overall by 152, or 54% from June.

“Losses over the month were somewhat muted,” the analysts said of July. Denver-Julesburg Basin permits dropped by 49, or 54% m/m.The Powder River Basin saw a decline of 38 permits from June, down 17%.

After permits are pulled, it usually takes operators three to six months to move equipment and begin development. For the week ending last Friday (Aug. 19), the U.S. rig count eased one unit lower week/week to finish at 762, according to Baker Hughes Co. (BKR). The 762 active domestic rigs compare with 503 rigs running in the year-earlier period, the BKR numbers showed, which are based partly on data from Enverus.

The Permian accounts for 40% of the total permits issued in the United States, followed by the Eagle Ford Shale, with a 13% share, the Evercore analysts noted. 

Following a 13% decline in June m/m, Texas overall saw permits in July jump by 272 permits, or 16%, driving overall growth. New Mexico followed, up 111 m/m or 66%, with Louisiana at 108 permits, which was 94% higher than in June. Utah also reported an increase, with 89 permits recorded in July, which was 356% higher m/m. 

Wyoming permitting last month fell by 49, or 18% from June, while Colorado was off by 48, or down 67%. There also were declines in North Dakota, down by 19 or 20% m/m; Alaska, down by four or 22%; and Arkansas, down also by four or 40%.

Strengthening Texas Jobs Picture 

Meanwhile, energy-related jobs are seeing an uptick, according to the U.S. Bureau of Labor Statistics. The government agency reported a 1.6% increase in exploration and production jobs for July, which was about 21% higher year/year and close to 14% year-to-date.

According to the Texas Independent Producers and Royalty Owners (TIPRO), direct upstream employment in the state during July totaled 202,800, an increase of 6,800 from June.

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“Texas upstream employment in July 2022 represented an increase of 35,400 positions compared to July 2021, including an increase of 8,600 in oil and natural gas extraction and 26,800 jobs in the services sector,” TIPRO noted. 

Unsurprisingly, the Houston metropolitan area, which is the center of the state’s energy industry employment, added 2,000 upstream jobs in July over June, for a total of 68,800 direct positions.

“Houston metro upstream employment in July 2022 represented an increase of 11,000 jobs compared to July 2021, including an increase of 5,200 in oil and natural gas extraction and 5,800 jobs in the services sector,” the industry group noted.

There were 13,614 “active unique jobs postings for the Texas oil and natural gas industry in July, an increase of nearly 10% compared to June numbers,” it said. 

“The growth in July upstream employment once again illustrates a high demand for available talent in-line with increasing levels of exploration and production activities in the state to meet growing energy needs here and abroad,” said TIPRO President Ed Longanecker. “Despite this growth, Texas operators face numerous challenges, including workforce shortages, supply chain disruptions and growing concerns over policy decisions coming from Washington, DC.”

Texas Oil & Gas Association President Todd Staples said the state’s job growth “is good news, because these high quality jobs support hundreds of thousands of Texas families and contribute directly to our nation’s energy security and our state’s economic might.”
Since the September 2020 low point in employment, the state’s energy industry has added 45,800 upstream jobs, averaging growth of 2,082 jobs per month, Staples noted. “At 202,800 upstream jobs, July 2022 jobs were up by 35,400, or 21.1%, from July 2021. July’s employment topped 200,000 jobs for the first time since March 2020.”