Article Written By: Jacoby Garcia, Director of Sales, RigData
Part 3 of 3
The cliché says that a picture says a thousand words. While I hope to not have to do that here, those that understand the concept of drilling permits to be a forward-looking indicator of drilling (and ideally completion and production) activity, should be able to immediately see the predictive nature of the above pivot table.
Many astute sales people and analysts believe that monitoring daily or weekly drilling permits (or licenses in Canada) will allow them to have a complete picture of future drilling activity. Unfortunately that’s not true. Historically, E&P operators have drilled 50% of approved permits and have associated those decisions with commodity price changes and/or internal resource and/or capital constraints. The build-up and resulting backlog of undrilled and unexpired permits could rightly be called a permit inventory. Like many other inventories, nearly all permits/licenses have a limited “shelf life” and expire over time if not drilled. In seven (7) US states, permits have a two (2) year life, in 17 states permits expire in 1 year, in 10 states permits expire in 6 months.
The astute sales people and analysts however, may not be cross referencing the wells that have been drilled to these permits during that same time period; a daunting manual task if not systematically managed or if they are using paper/.pdf reports. As a result, salesman or business Development analysts may be tracking expired or drilled wells wastefully, where their efforts could be directed to more targeted pursuits.
Further Illustrative is that the planned 40000 (circled is divided across 30 states, with TX as the US states with the highest activity reflecting 36% of nationwide activity across 2850+ operators that have filed permits to drill. Not shown, but readily available is: # of days left before permit expiration, well orientation (HOR, VER, DIR), Well Classification (oil, gas) and whether H2S is present.
RigData’s Advanced Data services such as Wellscape 3.0 or Wellscape db can be used to determine undrilled, unexpired permits for insight for your pursuit teams or for placement into CRM systems like MS, SAP or Salesforce.
We invite you to explore our Wellscape data service offerings to determine whether having a more complete knowledge of permits can help you succeed!
