Exclusive: New U.S. well permits rise slightly in December after crude oil plunge

Fri Jan 9, 2015 4:49pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Kristen Hays

HOUSTON (Reuters) - New oil and gas well permits issued across the United States rose slightly in December and surged 72 percent in Colorado and Wyoming after falling sharply in November on tumbling crude prices.

Permit counts provided exclusively to Reuters by data firm Drilling Info showed 4,551 new well permits were approved last month, up less than 1 percent from November's count of 4,523.

New permits plunged nearly 40 percent in November compared with October, signaling a potential slowdown in the shale oil and gas boom that brought the United States head to head with Saudi Arabia as the world's top crude producer.

Crude oil prices have plunged 55 percent since June as demand has not kept up with hefty global supply, including that from the U.S. shale oil boom. [O/R]

Allen Gilmer, chief executive officer of Drilling Info, said the December counts were equivalent to December 2013 and January and February last year.

"What has been lost is the 2014 adds," he said.

New permit counts help indicate what drilling rigs will do several months in the future.

But they do not capture what many analysts consider better predictors of output: the length of new wells being drilled, and the number of points along each well being hydraulically fractured to coax oil out of tight rock.   Continued...

A pumpjack brings oil to the surface  in the Monterey Shale, California, April 29, 2013. REUTERS/Lucy Nicholson