Analyst reports drilling, exploration permits down in the GoM

Offshore staff

NEW YORK – Evercore ISI’s Oil Services, Equipment & Drilling group has provided its monthly update on the number of drilling permit data files with the US Bureau of Ocean Energy Management. The analyst firm said it believes that these permits are a “leading indicator for near-term drilling activity.” 

A total of 13 new permits were issued in the US Gulf of Mexico in February, Evercore ISI said. This number is down from 18 in January but in line with 13 in February 2015. Eight permits were issued for new wells, including two ultra-deepwater, three deepwater, two mid-water, and one shallow-water. 

Three permits were issued for side tracks while two were issued for bypasses. Permits for side tracks and bypasses have declined substantially year-on-year while new well permits have held up relatively well thus far (flat year-over-year). Though the number of ultra-deepwater and mid-water new well permits was relatively robust last year, deepwater new well permits fell 17% to 25 and shallow-water new well permits dropped 78% to just 14 (from 65), thus the current pace of new well permitting remains muted. 

Meanwhile, the number of new exploration plans filed in the GoM last month fell to just two (from eight) and operators filed plans to drill only two wells, down from plans to drill 27 wells in January. No development plans were filed to drill during February (or January) and development of the Lower Tertiary appears to remain a long ways off as the industry has filed few such plans over the past 12 months.

Two new offshore plans were issued so far in the first two weeks of March, the firm said. The group said that activity in the Gulf of Mexico is also “down sharply.”

Walter Oil & Gas filed an exploration plan for three wells in 836-ft (255-m) water depth, which is estimated to start in April. Shell filed an exploration plan for four wells in 7,404-ft (2,257-m) water depth estimated to start in May.


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