Permit approvals for U.S. onshore oil and gas drilling slowed in July versus June, dropping 8% to 1,538, according to new data compiled by Everus and Evercore ISI.
The decline was driven by the Permian Basin, which saw approvals overall drop by 9% or 64 permits to 666.
In the Appalachian Basin, the largest source of U.S. natural gas supply, permit approvals in the Marcellus and Utica shale plays totaled 162 in July, down from 171 in June. In the Haynesville Shale, the tally dipped to 26 from 29.
The Appalachian, Haynesville and Permian regions together accounted for two-thirds of U.S. total marketed natural gas production, according to the Energy Information Administration (EIA).
The permitting figures come amid a prolonged slump in U.S. natural gas prices, with storage levels sitting 13% above the five-year average according to the most recent EIA data.
NGI’s Daily Henry Hub spot price, which has not exceeded $3.00/MMBtu since January, averaged $1.920 on Thursday (Aug. 22).
Leading North American natural gas producers, including EQT Corp. and Chesapeake Energy Corp., have signaled intentions to curtail output until prices strengthen.
Elsewhere in the Lower 48, the Denver Julesburg-Niobrara and Powder River basins saw permitting drops of 36% and 39% in July, to 46 and 36 approvals, respectively. A collection of smaller plays throughout the country saw approvals decline by 31% to 109.
Broken down by state, exploration and production (E&P) permitting gains were reported in Kansas (24%), North Dakota (18%), Oklahoma (21%) and Louisiana (34%). These gains were offset, however, by declines in Texas (8%), Wyoming (56%), California (89%), Alaska (74%) and Colorado (34%).
On the employment front, jobs in the oilfield services sector dipped by 201 jobs in July versus June, “remaining relatively flat over the month but 2.8% down on a yearly basis,” said the Evercore research team led by James West. E&P employment was up 3% from July 2023 at more than 120,000 people employed in the United States, researchers said.
EIA is forecasting U.S. dry natural gas production to average 103.3 Bcf/d in 2024, from 103.8 Bcf/d in 2023. Production in 2025 is expected to tick upward to 104.6 Bcf/d.
“The main drivers for our forecast of growth in U.S. production next year are an increasing Henry Hub price and growing natural gas demand as feedgas for liquefied natural gas projects scheduled to come on line in 2H2024 and 2025,” EIA researchers said in the latest Short-Term Energy Outlook.
The U.S. oil and gas rig count, meanwhile, stood at 585 as of Friday (Aug. 23), down one unit from the previous week and 47 from the same point last year, according to Baker Hughes Co. and Enverus data. The Permian, Marcellus, Utica and Haynesville plays showed sequential increases of three, 25, nine and one rig, respectively.
