RigData Insights

Rig count recovery could be flatter in the second half

  • Wednesday, July 19, 2017
  • Posted By Meagan Wildfong

071917 Source: RADAR | July 13, 2017

 

The pattern for permit approvals for drilling new wells across the US is an upward trend, according to Platts RigData’s RADAR newsletter. So far, June has marked the high-water mark YTD for the number of approved permits to drill oil and natural gas wells at almost 3,600.

 

While the number of approved permits does track the average monthly rig count, what we also see from a comparison is that permitted results are a quite a bit choppier. Seasonal factors like vacations, holidays, and weather patterns all tend to cause the flow of permits show more randomness in their collection. Additionally, since permits are batched on Fridays, how the weeks fall during a month (i.e., the number of Fridays occurring in a month) can add to the noise seen in the numbers. Since March and June 2017 are both months containing 5 Fridays, the fact that these 2 months are the year’s peaks would seem to be less meaningful events.

 

While it must be noted that June was a +10% improvement over the previous 2017 peak in March, permitting took a steep drop in April and May. All in all, reports the RADAR team, permitting levels should be taken with a grain of salt because of their volatile nature. But the recent trends do give some reason to believe that the rig count recovery could be flatter in the second half of 2017.

 

 

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