Hey guys, it’s been a while since I’ve been active here, but I was turned on to this article and thought it was worth coming out of retirement to mention.
This particular article in Oklahoma Energy Today website’s March 6 lineup, titled “Number of Permits to Drill in Oklahoma Plunges More than Half”, states that depressed oil prices are responsible for the number of issued drilling permits (by the Oklahoma Corporation Commission) being cut in half since April 2014.
This sounds bad, and the situation certainly isn’t ideal, but from looking at the numbers given in the article, and assuming a semi-linear progression, we see a peak in April 2014, and a gentle decline to 2015. Not great news, but not exactly a ‘jumping out of 10th story window’ scenario either.
The third and last paragraph veers slightly off topic, discussing well completion numbers, and reveals 1,847 well completions from January to August 2014. This fact is a little “ho hum”, except for that the article also points out that among these 1,847 well completions, only 32 were dry holes.
This is some amazing information, only 32 duds? That’s a 98.3% success rate in finding productive wells!
In my opinion, this article felt engineered to get everyone up in arms over the collapsing oil and gas economy in Oklahoma, with an alarmist title and falling statistics. Instead I have found several indirect and highly suggestive pieces of data, whether by design or by accident, who knows?
- The issuing of well permits has slowed down, but is still ongoing. If the stock market can’t hold a straight line, then why is anyone surprised at rises and falls in these numbers? The glass is still half full in this case.
- With a 98% success rate in productive well completions, this suggests that the exploration divisions of the industry have become very good at their jobs. This means that IF you can generate interest in your land, and IF they decide to drill, THEN you’re golden. If they dig it’s 2% (1.73% to be exact) shy of a sure thing – pretty damn good odds.
- With a 98% success rate in productive well completions, you know these guys are all high-fiving each other and patting themselves on the back. The ability to determine whether or not a proposed well will be successful with a 1.7% rate of error is going to give a huge boost to confidence levels, which makes it more likely that someone is going to be willing to check out your land. After all, with only 1.7% chance of error, it’s barely a risk at all…
Here’s the link to the article:
http://okenergytoday.com/2015/03/permits-to-drill-in-oklahoma-plunge-more-than-half/