NEW YORK – In its most recent US Drilling Permit Monthly report, Evercore ISI’s Oilfield Services, Equipment & Drilling group found that Gulf of Mexico permitting took a step back after a solid string of sequential gains.
After three months of increases, new permits issued in the GoM decreased 56% over November.
The November total of seven new permits fell 56% from 16 in September, and was down 67% from permitting in November 2015.
No new ultra-deepwater or deepwater permits were filed in November, while midwater permitting showed some resilience, falling just 29% month-over-month to five permits. New well permits fell from six in October to one in November, with just one midwater permit filed. Side track permits held flat at four.
The analyst firm has found shallow-water permitting to be of consistent concern this year, although this month saw some growth, increasing from one permit in October to two in November. Shallow-water permits have shown the sharpest decline year-over-year, down 73% from this time last year and 88% from 2014. The analyst firm believes that offshore drilling will continue to show depressed activity as long as shallow-water permits remain at historically low levels.
In more encouraging news, offshore planning suggests some positivity moving forward, with BHP Billiton filing 28 well permits for midwater work in 1H 2017.
“Overall, we remain cautious in allocating optimism to the offshore space, but permitting trends have certainly shown upward momentum over the past three months,” Evercore ISI noted.