Texas drilling permits fall 50 percent in November

TEXAS – In November 2014, there were 1,473 new Texas drilling permits, down from 2,947 in October 2014.

This is a sign that oil companies are holding back from boring into their sweetest spots while crude prices linger below $70 a barrel.

The 50 percent fall marks the first time in the past year that the number of new Texas drilling permits has declined; permits rose as much as 24 percent in September 2014, according to Drillinginfo.

For now, it is not necessarily a signal that shale oil producers have found their breakeven point, but it shows oil companies don’t want to drill up good spots in what could be a temporary low-price environment, said Drillinginfo CEO Allen Gilmer.

“Given the faster decline of unconventional wells, more of your economics are dependent on your year-forward production,” said Gilmer. “Essentially, people are drilling locations that hold acreage.”