Drilling permit activity slows down amid record low oil prices

Drilling permit activity is slowing across Texas as oil prices crash to near $20 per barrel.

More than 900 exploration and production companies filed an average of 230 drilling permits per week in 2019, Railroad Commission of Texas data shows.

That activity has slowed down this month during the price war between Russia and Saudi Arabia, as well as weakened demand from the coronavirus outbreak.

From March 4 to 11, some 64 companies filed for 181 drilling permits. Those numbers fell to 59 companies filing 167 drilling permits one week later.

Still profitable at crude prices as low as $13.66 per barrel, Houston oil company EOG Resources leads the pack with 27 drilling permits filed over the two-week period for projects in the Permian Basin of West Texas and the Eagle Ford Shale of South Texas.

Nonetheless and in response to market conditions, EOG recently scaled back its 2020 drilling budget by nearly a third. The company plans to spend $4.3 billion to $4.7 billion on drilling, hydraulic fracturing and other capital projects this year.

Source: houstonchronicle.com