[thackney]

Exclusive: New U.S. oil and gas well November permits tumble nearly 40 percent
http://www.reuters.com/article/2014/12/02/us-usa-oil-permits-idUSKCN0JG2C120141202
Dec 2, 2014

Plunging oil prices sparked a drop of almost 40 percent in new well permits issued across the United States in November, in a sudden pause in the growth of the U.S. shale oil and gas boom that started around 2007.

Data provided exclusively to Reuters on Tuesday by industry data firm Drilling Info Inc showed 4,520 new well permits were approved last month, down from 7,227 in October.

The pullback was a “very quick response” to U.S. crude prices, which settled on Tuesday at $66.88 CLc1, said Allen Gilmer, chief executive officer of Drilling Info.

New permits, which indicate what drilling rigs will be doing 60-90 days in the future, showed steep declines for the first time this year across the top three U.S. onshore fields: the Permian Basin and Eagle Ford in Texas and North Dakota’s Bakken shale.

The Permian Basin in West Texas and New Mexico showed a 38 percent decline in new oil and gas well permits last month, while the Eagle Ford and Bakken permit counts fell 28 percent and 29 percent, respectively, the data showed.

excerpted for Reuters

[Vigilanteman]

They know where it is and they’ll be back once oil rises again, as it inevitably will. Murphy Oil sent my father an $80 check every year for more than 20 years for exploration rights on some remote mountain land which he owned. They never sent an exploration crew. The check basically paid most of his property taxes.

[Svartalfiar]

Plunging oil prices sparked a drop of almost 40 percent in new well permits issued across the United States in November, in a sudden pause in the growth of the U.S. shale oil and gas boom that started around 2007.

I've worked several meeting/shows for several different oil/gas/fracking companies/groups. None of it was specifically confidential, but I'll keep this to some general knowledge.

Most of the cost for the shale plays comes from the initial lease/well exploration/drilling. Once the wells are completed, costs are very minimal to keep producing. Closing a well incurs a decent amount of cost. So, our production isn't going to decline much very quickly. New wells fall off fast, but then have a steady 10-15% output (of their original amount) for several years-decades after the initial 3-4 years.

If it does fall to $40-50/bbl, yea, you'll see new wells taper off fast. Small companies (especially exploration-related, not production-related) will likely fold/be absorbed by their bigger buddies. Output may fall 10-20% as the current wells mature, but we'll still be producing lots and lots of oil for the forseeable future. Certain plays may slow down, as they're more expensive/difficult, but the big ones (Bakken, Eagle Ford, Barnett, Permian mainly) will stay about the same.