TAEP: Texas upstream industry expansion continued in 14th straight month

March 12, 2018
Oil and gas producers in Texas continue to increase production in response to higher wellhead prices, boosting the statewide upstream oil and gas economy.

Oil and gas producers in Texas continue to increase production in response to higher wellhead prices, boosting the statewide upstream oil and gas economy.

The Texas Alliance of Energy Producers’ Texas Petro Index (TPI), a composite index based on a comprehensive group of upstream economic indicators, showed a 14th straight monthly expansion in January. The index rose to 192.7 from 188.9 in December 2017. The index is up 25% year-over-year, and up more than 30% from November 2016 when the TPI stood at 148.2.

“According to TPI estimates, crude oil production in Texas in January totaled 119.4 million bbl, which would surpass all prior volumes in January, including the early 1970s when the statewide annual production record was set,” said Karr Ingham, economist and TPI creator.

“In addition, the posted price for crude oil in Texas in January jumped more than $6/bbl compared to December to average $60/bbl for the first time since November 2014,” Ingham said.

Estimated January crude production in Texas is up 21.9% from January 2017. With oil prices averaging $60.10/bbl, the value of Texas-produced crude amounted to $7.2 billion, up 48.8% year-over-year.

Texas natural gas output increased 2.7% compared with January 2017 to nearly 665.9 bcf. With gas prices in January averaging $3.62/Mcf, the value of Texas-produced gas increased 16.4% to more than $2.4 billion.

Baker Hughes’ count of active drilling rigs in Texas during January averaged 456 units, up 35.7% from January 2017. The number of original drilling permits issued was 1,166, up 22% year-over-year.

An estimated 226,200 Texans remained on upstream industry payrolls, up 15.5% from revised year-over-year levels, but down 23.4% from the estimated high of 295,200 in December 2014.