Texas drilling permits and completions show mixed performance in August

Kurt Abraham, Editor-in-Chief September 03, 2021

According to figures released September 3rd by the Railroad Commission of Texas (RRC) in Austin, the state’s drilling permits issued fell to their lowest level since May, while new drills hit their highest total since March.

The RRC said it issued 687 original drilling permits in August 2021, compared to 451 in August 2020. The August 2021 total includes 613 permits to drill new oil or gas wells, 10 to re-enter plugged well bores, and 58 for re-completions of existing wellbores.

The breakdown of well types for original drilling permits in August 2021 is 149 oil, 53 gas, 452 oil or gas, 21 injection, and 12 other permits.

Recent trends. The disappointing permits figure comes after upward progress from May’s level of 631 permits, with June and July coming in at 739 and 779, respectively. Of course, another way to look at things is that Texas operators continue to be uncharacteristically restrained in spudding new wells, preferring to add to their balance sheets. The August total was 236 wells above the corresponding figure a year ago, and continues the pattern of new permits exceeding monthly totals in 2020 by healthy margins.

Within the August 2021 permits total, the greater number issued in one jurisdiction was 357 in District 8, in the heart of the Permian basin. Coming in second was District 1 (Eagle Ford shale) with 77 new permits, followed by District 2 (Eagle Ford shale) with 44.

On the new drills side of the ledger, while the recovery from 2020’s collapse is still somewhat muted, there is room for optimism. The August tally of 637 new drills is the highest since 686 in March, and is further improvement from the levels of April (488), May (503), June (582) and July (548).

Just like the situation with permits, the greatest number of new drills was in District 8 at 439, followed by District 1 at 73 and District 7C (Permian basin) at 58.



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