Permian Could See Production Surge As New Permits Reach All-Time High

Horizontal drilling permits for new wells in the Permian Basin hit an all-time high in March, with 904 total permit awards, driven by elevated oil prices and production demand, Rystad Energy research shows. Weekly approved permits have hovered between 188 and 227 since March 7, 2022, an unprecedented period of high activity that pushed the four-week average to 210 for the week ending April 3, a record for horizontal permit approvals in the core US shale patch over four weeks.

“This is a clear signal that operators in the basin are kicking into high gear on their development plans, positioning for a significant ramp-up of activity level and an acceleration in the speed of output expansion over the next few months once supply chain bottlenecks ease. The surge in permitting activity positions the industry for continuous rig count additions in the second half of 2022 and foreshadows a significant increase in supply capacity from early 2023,” says Artem Abramov, Rystad Energy’s head of shale research.

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Source: OilPrice