Midland district drilling permits represent almost half of the whole state

The Texas Railroad Commission released statistics on April 7 summarizing March drilling and completions activity in the state. The commission reported issuing a total of 1,310 drilling permits in March, far above the 511 issued in March 2016. Compared to the 991 drilling permits issued in February, drilling activity increased by 32% in just one month.

The vast majority of these drilling permits, 1,144, were for drilling new wells. An additional 155 permits were issued for re-completions and 11 for re-entering plugged wellbores.

Completions slowing, not growing

According to the RRC, 712 permits were issued for completions in March of 2017:

  • 586 completions targeted oil
  • 77 targeted gas
  • 49 were for injection wells

While 2016 may be remembered for a painful slowdown in drilling permits, 2017 may be remembered for a completions slowdown. The commission issued more permits for completions in 2016, with 1,182 permits issued in March last year compared to the 712 completion permits it issued this March. Looking at completion permits, 991 were issued in February this year—almost 40% more than were issued in March.

The accelerating drilling activity in the Permian is plainly apparent. The Midland district, the eighth district RRC monitors, saw nearly half of all permits issued. A total of 585 drilling permits were issued in the Midland district in March, 45% of the total issued in the state. On the completion side, 43% of all completion permits issued in March were issued for well completions in the Midland district.

March Drilling Permits Surge by Factor of 2.56 in Texas Year over Year

The Eagle Ford represents much of the remaining activity. Most Eagle Ford activity takes place in the first and second districts RRC monitors, the San Antonio and Refugio areas. A total of 286 drilling permits were issued for these two districts in March. 171 completion permits were issued in the Eagle Ford, just over 25% of all completion permits issued last month.

Drilling permits far outpacing completion permits – a flip-flop from 2016

Overall, this report suggests that the number of DUCs in Texas is heading toward a significant increase.

Drilling permits issued exceeded completion permits by 724 in March, continuing the trend seen in 2017.

March Drilling Permits Surge by Factor of 2.56 in Texas Year over Year

Data: Texas Railroad Commission, Chart: EnerCom Analytics

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