NEW YORK – Drilling permit numbers in the US Gulf of Mexico continue to be unpredictable while onshore data indicates that its recent resurgence is in no danger of stopping, according to the latest report from Evercore ISI. Despite being just two full months into the year, US land permitting is already 25% of the way toward eclipsing the 2016 total.
The data was included in the firm’s recently issued US Drilling Permit Monthly, developed by its Oilfield Services Equipment & Drilling group.
The February total of eight new permits for the US Gulf of Mexico fell 47% from 15 in January, and was down just 38% from permitting in February 2016. Shallow-water permitting held flat at four this month, with two new wells and two bypasses approved. Two new midwater permits were filed in February, down from seven filed in the previous month.
Deepwater permitting was minimal, with just one side track approved. Ultra-deepwater permitting notched a single new well permit in February, up from no activity a month ago. Overall, new well permits fell from eight in January to three in February, while side track permits fell 60% to two and bypass permits increased 50% to three.
The sharpest decline from the 2014 peak has been in shallow-water permitting, which is down 88% in 2017 from year-to-date 2014.
Evercore has maintained thatoffshore drilling and jackup utilization will continue to languish as long as shallow-water permits remain at historically low levels. Offshore planning from last month points to modest jackup improvement in the 2Q-3Q timeframe, with seven drilling plans filed for possible tieback work (four shallow-water and three midwater).
“Overall, we remain cautious in allocating optimism to the offshore space, but permitting trends have certainly shown upward momentum over the two months,” the firm notes.