June is usually a strong month for U.S. oil and gas permitting, but activity overall dipped for the second month in a row, according to an analysis by Evercore ISI.
The investment firm each month compiles a rundown of permitting activity in the United States using state and federal data. According to Evercore, June saw an 8% decrease in permitting activity from May, with 266 fewer permits recorded.
Still, there was a 40% jump in Lower 48 permitting year/year.
“June has historically reported an increase from May regarding permitting activity, increasing on average 16% over the last five years, with 2021 as the only decline of 6%,” said Evercore analyst James West.
During May, Lower 48 permitting plunged by 17% from April, led by the Permian Basin, which was off 18%.
Texas, which holds the majority of the Permian leasehold, saw permitting overall down in June by 251 month/month (m/m), or by 13%.
“The state had reported monthly increases from August 2021 to April 2022, with May breaking the growth streak,” West noted. “Louisiana also reported a monthly decrease,” off by 65 or 36% m/m.
The Permian during June again led the declines m/m, down by 158 permits or 11%. The Haynesville Shale recorded a 44% shortfall, off by 109. The Eagle Ford Shale permitting slumped by 16%, or by 77 permits.
Of note, the Permian represented 41% of the total number of permits issued in the country during June, “followed by the Eagle Ford Shale with a 13% share and smaller plays with 9% of the total,” West said.
Permitting during June rose, though, in Kansas, up 31%, or by 40 permits. Oklahoma posted a 17% gain, with 18 more permits than in May, while Wyoming rose 6%, or 15 more permits.
The state gains translated into a permitting increase in Lower 48 formations in the Midcontinent and North Texas.
The Mississippian Lime in Kansas, for example, recorded a 27% bump m/m, up by 49 permits. In Wyoming’s Powder River Basin, permitting climbed by 6%, or 14 permits. Bakken Shale activity was up 13%, or by 11 permits.
The Barnett Shale in North Texas also recorded a notable increase m/m, up 11%, with 11 more permits drawn. The “smaller plays” overall were 8% higher, up by 20 permits, Evercore noted.
Meanwhile, the largest Permian explorer, Pioneer Natural Resources Co., drew the most permis for June with 93, which was 27% more than in May, or 42% higher, Evercore noted. Other notable producers pulling permits in the Permian during June were Diamondback Energy Inc., with 28 permits, and Occidental Petroleum Corp., with eight.
Offshore drilling permit activity for June was not included to reflect May’s data, as the Bureau of Ocean Energy Management’s website “remained unavailable.”
