License to Drill: Oil Exploration's Tough After the Spill

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About a month ago, I asked when it would be "game on" in the Gulf. I was looking ahead to life after the deepwater drilling moratorium, which the government lifted on Oct. 12. Rig operators like Noble (NYSE: NE  ) and Diamond Offshore (NYSE: DO  ) need to get their rigs recertified under new regulations, but that's a relatively straightforward matter. It'll be far trickier for operators to secure permits on new exploratory wells -- particularly in reservoirs that have not been previously penetrated.

As of this morning, the Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) has approved zero new wells, zero bypass wells, and one sidetrack well in the deepwater, since the lifting of the moratorium. Sidetracking involves either drilling around an obstruction in the well, or drilling laterally from an unobstructed wellbore to tap another productive zone nearby.

The pace appears glacial. Let's take a little stroll through recent company conference calls to see what various operators are saying about their permitting prospects.

Chevron (NYSE: CVX  ) confirmed that it had submitted a permit to resume drilling its Moccasin well late last month. The company said it was working with the BOEMRE to clear up any uncertainties, but couldn't say how long it would take to get approved. Another major, ExxonMobil (NYSE: XOM  ) , is seeking to drill at its Hadrian prospect, where the company had a rig on site at the time the moratorium was imposed.

Noble Energy's (NYSE: NBL  ) CEO said the company faces "considerable uncertainty" in the Gulf, but that he's "becoming more confident that drilling will resume reasonably soon, perhaps by year end." The company may have an advantage in that they have a working certified rig.

Turning to Anadarko Petroleum (NYSE: APC  ) , one of the most successful deepwater explorers in the world, the company said it "must have greater clarity around the regulatory process." Anadarko hopes to have its permits to complete previously suspended activity at the Caesar/Tonga megaproject in hand by the end of the year. Rather amazingly, the project is still on schedule and on budget. As for the time required to get exploratory wells permitted, the company said that is a "real unknown."

So, there you go, Fools -- uncertainty reigns for the time being. For a company like Chevron, with projects spanning the globe, permitting delays are more of an annoyance than anything. For a company like Cobalt International Energy (NYSE: CIE  ) , which doesn't have much else going on, the stakes are higher. I'll be tuning into that call (scheduled for a week from tomorrow) with great interest.

Not sure how to navigate the waters in oil and gas? Check out this special report on "The One Energy Stock You'll Ever Need."

Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his CAPS profile or follow his articles using Twitter or RSS. Chevron is a Motley Fool Income Investor pick. The Fool owns shares of ExxonMobil and Noble. The Motley Fool has a disclosure policy.

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