Shallow water drilling permits
In May, no drilling permits were issued in the shallow waters of the Gulf of Mexico. In the first five months of 2018, only two drilling permits were issued, down from seven in the same period last year.
Deepwater drilling permits
There were no deepwater permits issued in the Gulf of Mexico in May. In April, there were 15. In the first five months of 2018, there were 35 compared to 24 in the same period last year.
What’s a drilling permit?
A drilling permit allows E&P (exploration and production) companies to drill a well. We can gauge customer sentiment and E&P companies’ future plans by looking at drilling permit statistics. More drilling permits suggest an improving outlook for offshore drillers (XLE) such as Ensco (ESV), Seadrill (SDRL), Transocean (RIG), Noble (NE), and Rowan Companies (RDC).
Returned and pending applications
Returned and pending applications give us an idea of the probability of permit approvals in the coming months. However, not all pending and returned applications are approved. Permits are only issued if companies comply with safety regulations and standards.
In May, five drilling applications were returned for more information or clarification, which is the same as April. In September, 11 applications were pending compared to 12 in August.