|
 Data provided exclusively to Reuters on Tuesday by industry data
firm Drilling Info Inc showed 4,520 new well permits were approved
last month, down from 7,227 in October.
The pullback was a "very quick response" to U.S. crude prices, which
settled on Tuesday at $66.88 <CLc1>, said Allen Gilmer, chief
executive officer of Drilling Info.
New permits, which indicate what drilling rigs will be doing 60-90
days in the future, showed steep declines for the first time this
year across the top three U.S. onshore fields: the Permian Basin and
Eagle Ford in Texas and North Dakota's Bakken shale.
The Permian Basin in West Texas and New Mexico showed a 38 percent
decline in new oil and gas well permits last month, while the Eagle
Ford and Bakken permit counts fell 28 percent and 29 percent,
respectively, the data showed.
That slide came in the same month U.S. crude oil futures fell 17
percent to $66.17 on Nov. 28 from $80.54 on Oct. 31. Prices are down
about 40 percent since June.
U.S. prices fell below $70 a barrel last week after the Organization
of Petroleum Exporting Countries agreed to maintain output of 30
million barrels per day. Analysts said the cartel is trying to
squeeze U.S. shale oil producers out of the market.
Total U.S. production reached an average of 8.9 million barrels per
day in October, and is expected to surpass 9 million bpd in
December, the highest in decades, according to the U.S. Energy
Information Administration.
Gilmer said last month's pullback in permits was more about holding
off on drilling good locations in a low-price environment than
breaking even on well economics.
"I think in this case this was just a quick response, saying 'there
are enough drill sites in the inventory, let's sit back, take a look
and see what happens with prices,'" he said.
[to top of second column] |
In addition to the Permian, Eagle Ford and Bakken, about 10 other
regions tracked in Drilling Info's data showed declines as well. The
Niobrara shale in Colorado and Wyoming saw a 32 percent decline in
new permits, while the Granite Wash in Oklahoma and Texas and
Mississippian Lime in Oklahoma and Kansas retreated 30 percent and
27 percent, respectively.
Gilmer said the pullback in new permits is a precursor to a decline
in rigs. The U.S. land rig count has been largely flat since
September, hovering around 1,860 oil and gas rigs, according to
Baker Hughes Inc.
"This will show up," he said. "I expect we'll start seeing rig
impact in a couple of months."
Share prices of drillers including Patterson UTI Energy Inc,
Helmerich & Payne Inc and Nabors were slightly lower on Tuesday.
(Reporting By Kristen Hays; Editing by Terry Wade and Alan Crosby)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
