Want an update on the number of oil and natural gas drilling activity permits issued by the Texas Railroad Commission? Currently it reached an all-time high in March, at more than 1,100. Hundreds of companies of all sizes are jumping into the fray. Activity is picking up across the state, with the Permian Basin reportedly seeing more than 900 horizontal permits.
The demand for fuels began to surge globally as the economy reopened after the worst of the pandemic, yet the pace of recovery in energy activity lagged for a variety of reasons. Even rapidly rising prices weren’t enough. One prominent impediment has been federal policies toward the industry and fears that future activity will go through curtail. Capital has also been difficult to obtain, with investors reluctant to finance drilling programs in the wake of uncertainty regarding adverse governmental actions and the lack of sufficient returns during prior periods. A more pragmatic reason is simply that many wells were drilled but not brought into production before the COVID-19 shutdown, thus allowing production initially to be increased while rigs sat largely idle.
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