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Bureau of Land Management Application for Permit to Drill Data Analysis

The U.S. Department of Interior Bureau of Land Management (BLM) recently released the final month Applications for Permit to Drill (APD) Approved and Available to Drill data for fiscal 2023. The BLM APD datasets includes the number of approved APDs, processed APDs (which includes rejected, returned, and withdrawn APDs in addition to approve APDs), APDs approved and available to drill and pending APDs.

Approved APDs are valid for two years or until the lease expires, whichever occurs first, but the BLM may grant a two-year extension to allow the operator more time to drill. Permitting data can be seen as a proxy for activity, regulatory hurdles and political fluctuations as it relates to drilling for oil & gas on federal lands.

Federal (excluding Indian lands) approved APDs were 3,580 in fiscal 2023 (Oct. ‘22 to Sept. ‘23), up 25.5% versus fiscal 2022.

Monthly Data is available for the last three fiscal years, with some gaps in the datasets. We have annualized monthly data to visualize the recent trend in APD approvals. The BLM was considerably active with approving APDs in August 2023.

North Dakota led by Lea and Eddy counties represented 67.7% of fiscal 2023 APD approvals by state, the highest on record for NM.

Drilling activity on Federal lands is considerably concentrated in two counties in New Mexico.

New Mexico has risen from under 15% of total APD approvals to nearly 70%.

BLM data by state is available for four years showing received, processed and approved Applications for Permit to Drill.

U.S. totals indicated received, processed and approved APDs are down the last two fiscal years.

Despite the nominal activity being lower, BLM efficiency metrics appear to have improved under the Biden Administration, counter to the prevailing narrative. While these metrics don’t measure approval timing, processed-to-received and approved-to-received metrics are better in fiscal 2022 and 2023 - the first two full years under Biden - versus fiscal 2020, the last year under the Trump Administration.

The total number of approved and available APDs was 7,029 at the end of fiscal 2023 (Sep. ‘23), down only 1% from the last available data point from the last Administration (Sep. ‘20).

The bigger question from this dataset is what happened to the pipeline of approved APD between September and December 2022. October and November reports are missing. There was a 22% drop in that timeframe. Our guess is a number of APDs expired, but until the spud data is released with year-end data, that is admittedly the easiest explanation.

Total approved and pending APDs, show no real trend outside the September to December 2022 drop in approved APDs.

The year-to-year change in APD approvals hasn’t necessarily correlated to Federal oil & gas production, with strong growth through the last several years.

More concerning to us is the complete collapse in Expressions of Interest (EOIs) in recent years. We look forward to this data for 2023. The BLM operates on a nomination basis whereby oil & gas operators request leases be included in competitive auctions. This data would suggest the oil & gas community sees little upside remaining on U.S. Federal onshore leases.

47% of nominated BLM acreage since calendar year 2006 has been in Nevada, hardly a hotbed of oil production. More leasing doesn’t correlate to more oil & gas production if the rocks hold no hydrocarbons.