Lease

The permitting process for energy projects can drag on for years, resulting in multiple state and federal hurdles, environmental studies and judicial reviews. This is true not only of traditional energy projects involving oil and gas but also renewables like wind and solar and long-distance transmission, which are seen as key elements of the energy transition. Legislation proposed by a pair of influential senators aims to help move these projects along every step of the way but getting Congress to agree on anything — especially during an election year — figures to be a formidable challenge. In today’s RBN blog we examine the Energy Permitting Reform Act of 2024. 

Can it make sense for a producer to drill a well in today’s low price environment even if the rate of return on that well is below zero?  Surprisingly the answer is yes, and the issue has important implications for the impact lower prices will ultimately have on U.S. oil and gas production volumes.   Factors such as lease requirements can incentivize drilling and cause production levels to continue growing, even when spot prices don’t seem to support it.  As the new economics of lower oil, NGL and natural gas prices suggest that production declines are just down the road,  the market’s quest to nail down when and how much production will decline  has brought the role of “hold by production” (HBP) drilling into the spotlight. Questions about HBP status and its role in producers drilling strategies have been a staple in the latest round of earnings calls.Today we take a closer look at HBP drilling.