WICHITA FALLS , Texas, Nov. 2 (UPI) -- The pace of recovery in the exploration and production side of the energy industry in Texas has been relatively slow, a state economist said.
The Railroad Commission of Texas, the state energy regulator, reported preliminary production of crude oil averaged 2.4 million barrels per day, about a half percent higher than the same time last year. So far over the past 12 months, Texas has produced about 1 billion barrels of crude oil.
Companies tied to the exploration and production, or upstream, side of the energy sector showed contraction, but at a slower pace than previous quarters. Karr Ingham, an economist who created a state petroleum index to measure industry activity, said declines persisted for the No. 1 oil producer in the country.
"The response of upstream investment to current prices and cost structures will set the stage for a sustained recovery at some point in the future," he said in an emailed report. "We may want the recovery to be faster, but that probably isn't the best outcome right now."
Ingham said data continued to show a build in oil supplies on the market and unless there's a strong demand response or members of the Organization of Petroleum Exporting Countries manage some form of production agreement, the dynamics could still favor the downside.
Total U.S. crude oil production increased slightly for August, with shortages mostly from North Dakota offset by gains from Alaska and the Gulf of Mexico. Output from Oklahoma, Texas and New Mexico was relatively flat. OPEC, meanwhile, left a weekend meeting to review a September production ceiling with no concrete terms for how to move forward.
By Ingham's measure, the average price for oil for September, the last full month for which he published data, was $41.48 per barrel, which valued the oil produced from Texas at around $3.8 billion. That value is 10 percent less than last year.
On the exploration and production side of energy in Texas, the state average for active drilling rigs for September was 33.5 percent lower than the previous year. According to Ingham, rig counts peaked in relative terms more than four years ago.