Permits to develop natural gas and oil in the Lower 48 slumped in August, with the biggest operating area, the Permian Basin, off by double-digits from July and 12% year-to-date.
“Permian permitting continues to slow,” down by 407 or 37% month/month (m/m), with year-to-date permits declining by 820, according to Evercore ISI analysts led by James West.
Each month the firm updates domestic permitting activity using state and federal data. Exploration and production (E&P) companies pull permits to drill about three to six months before development begins.
A total of 1,902 permits was issued nationwide in August, “a 30% decrease on a monthly basis following July’s 20% monthly decline,” the Evercore analysts said. Year-to-date, nationwide permitting has fallen by 8% from the same period of 2022.
In addition to a drop in permitting activity in the Permian, “mild losses” were reported in the Powder River Basin, down 15% m/m with 63 fewer permits. Eagle Ford Shale activity fell by 27% from July, off by 56 permits. The smaller unconventional plays overall saw 53% fewer permits than in July, falling by 113.
Bakken, Granite Wash Improve
There were two basins with more activity in August than in July. The Bakken Shale improved, up by 12% m/m, with eight more permits. Granite Wash activity rose by 38% with five more permits requested.
By state, Texas led the monthly slump, off 46% m/m, with a total of 687 permits, “the state’s lowest permit count since September 2021,” the analysts noted. “Such permitting activity losses were followed by California, down to 34 filed permits,” down by 82% or 155 fewer than in July. Wyoming also reported a 15% dip m/m (down by 75), with 414 permits drawn.
“Small permitting increases were reported in New Mexico,” with 219 requested, up 55 m/m or 34% higher. Pennsylvania activity also rose, with 121 filed permits, which was 17 more than in July, or 16% higher.
Oilfield services and E&P employment is slowly increasing, according to trade groups. The Energy Workforce & Technology Council, reported that oilfield services employment increased by 30 basis points (bps), or 4.6% on a yearly basis.
“E&P employment similarly increased 30 bps and is now 2.7% up from August 2022 numbers,” the Council said.
The Texas Independent Producers and Royalty Owners Association (TIPRO) also reported increasing jobs in Texas and beyond during August, citing Current Employment Statistics from the U.S. Bureau of Labor Statistics.
According to the TIPRO analysis, “direct Texas upstream employment for August 2023 totaled 208,500, an increase of 1,200 jobs from July employment numbers.” Upstream employment in the state during August “represented the addition of 18,200 positions compared to August 2022, including an increase of 2,300 jobs in oil and natural gas extraction and 15,900 jobs in the services sector.”
Total unique oil and natural gas job postings were led by Houston (3,935), and two cities in the Permian, Midland (1,012) and Odessa (556), said TIPRO.
According to the trade group, a total of 11,951 “active unique jobs postings” were posted for the state’s oil and gas industry during August, including 4,409 new job postings added during the month.
“In comparison, the state of California had 3,641 unique job postings last month, followed by Louisiana (1,790), Oklahoma (1,609), and Pennsylvania (1,364),” TIPRO noted. There also was a total of 53,810 unique job postings nationwide for the oil and gas industry last month.
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