NEW YORK – The number of approved US offshore drilling permits has shown a second straight sequential gain, indicating some stabilization in the industry, according to Evercore ISI’s latest US Drilling Permit Monthly Report.
The September total of 10 new permits grew 11% from nine in August, and was down 45% from permitting in September 2015, the report found.
Evercore specifically noted that deepwater activity showed the strongest bounce back from last month, with one new well and three side track projects permitted. New well permits grew 50% from four to six, with two incremental adds in midwater, which grew from three in August to five in September.
Side track permits totaled three, registering no change from August. Ultra-deepwater permitting was stymied in September after the first August gain in several months, as no new ultra-deepwater wells were permitted.
However, the sharpest decline year-over-year continues to be shallow-water permitting, down 70% from this time last year. No new permits were issued for shallow-water wells, permitting for which is down 85% from 2014. Evercore maintained that offshore drilling will continue to show depressed activity as long as shallow-water permits remain at historically low levels.
Offshore planning suggests some positivity moving forward, as one W&T Offshore was planned for November, and four GoM wells were planned for December: two by Apache and two by LLOG.
Despite the recent yearly highs reached in crude oil prices, the analyst group noted that it remained cautious in its optimism toward the offshore industry, as it feels that prices have not quite yet increased to levels needed to support appreciable offshore activity growth.