Well Permits Fall to Lowest Point Since Start of Pandemic

The U.S. well permit count in the full month of January sunk to its lowest level since the nadir of the COVID-19 pandemic in May 2020, and was the second-lowest total in the last 10 years. The count of 1,012 permits was down 25% from the total of a year earlier.

The slump in permits, shown in data reported by Rextag, aligns with a report from the Energy Information Administration (EIA) that the trend of rising net imports of crude is expected to continue in 2022. In 2021, net imports exceeded exports, reversing the role of the U.S. as a net exporter that was established in 2020. That year was marked by a sharp decrease in oil demand as a result of the pandemic.

Texas dominated the list of permits issued in the period ending in mid-February with 733. The Permian Basin is home to the leading counties in the state for the permits. Three counties—Webb, Atascosa and Live Oak—are located in the Eagle Ford Shale.

Pioneer Natural Resources Co. and XTO Energy Inc. dominated permitting in Martin County, Texas, in the Permian. Endeavor Energy Resources LP led companies acquiring permits in the No. 2 county, Midland.

The only non-Texan among the top 10 was McKenzie County, N.D., in the Bakken, where Ovintiv Production Inc. secured 16 permits and Oasis Petroleum North America LLC secured eight. The counties of Stephens, Kingfisher and Blaine led permitting in Oklahoma, where Citation Oil & Gas Corp., Ovintiv and Devon Energy Corp. were the major players.