HOUSTON – The oil patch gave up some new hints Monday about what drilling activity may look like as oil prices plummet.
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 in an email.
“Given the faster decline of unconventional wells, more of your economics are dependent on your year-forward production,” Gilmer said. “Essentially, people are drilling locations that hold acreage.”
Drillinginfo data shows there were 1,473 new Texas permits in November, down from 2,947 in October. Gilmer said the rest of the United States is seeing the trend, as well.