Evercore: Drilling permits in the US Gulf of Mexico up slightly

Offshore staff

NEW YORK CITY – A total of 21 new drilling permits were issued for the US Gulf of Mexico in November, up from 19 in October but down from 25 a year ago, according to Evercore ISI’s US Drilling Permit Monthly report of December 2015.

Six permits were issued for new wells, including one ultra-deepwater, one deepwater, three midwater, and one shallow water. Eight permits were issued for side tracks while seven were issued for bypasses. 

As of mid-December, a total of 205 new permits had been issued year to date, down 30% versus 2014, driven by sharply lower bypass and new well permits. Only 76 new well permits had been issued year-to-date compared to 120 over the previous year.

While the number of ultra-deepwater, deepwater, and midwater new well permits were largely resilient over 2015, only 13 shallow-water new well permits had been issued by mid-December, down 78% from 60 a year ago.

Meanwhile, the number of new exploration plans filed in the Gulf rose to seven (from five) but operators filed plans to drill a total of just 11 wells, down from 22 in November 2015. The report noted that no development plans had been filed to drill in the past two months, and went on to say that the development of the Lower Tertiary “appears to remain a long ways off as the industry has filed few development plans year-to-date.”

“With pricing having contracted sharply,” the report comments, “we expect development activity to accelerate slightly in the coming months and years and believe the Gulf of Mexico will be the only relative bright spot for deepwater activity in 2016-2017.”


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