Drilling-permit issuance across 30 U.S. states is decidedly up since 1994, according to a survey by Lehman Brothers. James D. Crandell, New York-based managing director, oil-services equity research, Lehman Brothers, contends there's a very strong relationship between drilling-permit issuance and rig count, based on his research during the past 20-plus years. In 1994, when domestic drilling-permit issuance reached about 2,300, the U.S. rig count stood at around 750. This year, the number of drilling permits in the U.S. issued has shot above the 4,400 mark while the rig count eclipsed 1,300. "We continue to believe the domestic rig count will move higher in the coming months as additional rigs are unstacked; however, growth will be limited by the number of available rigs and personnel," says Crandell. Bolstering this outlook are recent upward revisions to commodity-price forecasts by the equity-research group at JP Morgan Securities. In mid-September, that firm revised its 2005 Nymex forecast to $56.86 for oil from an earlier estimate of $51.56, and its 2006 forecast to $56.25 from a previous $48. On the natural gas side, the market-maker boosted its 2005 and 2006 forecasts to $7.96 and $7.80, respectively, from prior corresponding estimates of $6.85 and $6.50. For more on this, see the October issue of Oil and Gas Investor. For a subscription, call 713-993-9320, ext. 126.
Recommended Reading
E&P Highlights: May 13, 2024
2024-05-13 - Here’s a roundup of the latest E&P headlines, with a couple fields coming online, as well as new contract awards.
New Permian Math: Vital Energy and 42 Horseshoe Wells
2024-05-10 - Vital Energy anticipates making 42 double-long, horseshoe-shaped wells where straight lines would have made 84 wells. The estimated savings: $140 million.
SM Energy Targets Prolific Dean in New Northern Midland Play
2024-05-09 - KeyBanc Capital Markets reports SM Energy’s wells “measure up well to anything being drilled in the Midland Basin by anybody today.”
Vår Selling Norne Assets to DNO
2024-05-08 - In exchange for Vår’s producing assets in the Norwegian Sea, DNO is paying $51 million and transferring to Vår its 22.6% interest in the Ringhorne East unit in the North Sea.
Crescent Energy: Bigger Uinta Frac Now Making 60% More Boe
2024-05-10 - Crescent Energy also reported companywide growth in D&C speeds, while well costs have declined 10%.