Shallow water drilling permits
In December 2017, no drilling permits were issued in the Gulf of Mexico’s shallow waters. In November, one drilling permit was issued. For fiscal 2017, 13 shallow water drilling permits were issued, which is higher than ten permits issued in the same period in 2016.
Deepwater drilling permits
There were five deepwater permits issued for December 2017—more than four permits issued in November 2017. In fiscal 2017, there were 52 drilling permits compared to 65 issued in 2016. A permit gives exploration and production companies approval to drill a well. Tracking drilling permits gives us an idea of customer sentiment.
A higher number of drilling permits suggests an improving outlook and vice versa for offshore drillers (IYE) like Transocean (RIG), Ensco (ESV), Diamond Offshore (DO), Noble (NE), and Rowan Companies (RDC).
Pending and returned applications
Returned and pending applications give us an idea about how many drilling permits might be approved in the coming months. Not all pending and returned applications are approved. Permits are only issued if companies comply with safety regulations and standards. In December 2017, five drilling applications were returned for more information or clarification. In the same month, two applications were pending.