By OGJ editors
HOUSTON, June 18 -- The number of drilling permits issued for 30 US states increased 7.2% during May from the April count as adjusted for comparable numbers of filing days, Lehman Bros. Inc. reports.
The improvement was driven by sequential increases in Kansas 18%, Kentucky 38%, Michigan 69%, Texas 16%, and West Virginia 36%.
"The number of permits issued has improved over 20% since the March trough, which suggests continued strength in the US rig count ahead," said James Crandell, a Lehman Bros. analyst based in New York.
Lehman Bros. said its analysis of the relationship between drilling permit issuance and the rig count is very strong. Most well permits that are filed for end up getting drilled because companies already have invested in land costs, legal fees, and geological expenses.