Texas drilling permits lower than last year

State data show there are signs of recovery as shale shows resiliency.

By Daniel J. Graeber

AUSTIN, Texas, Dec. 9 (UPI) -- State regulators in Texas said they issued 2 percent fewer oil and gas drilling permits in November than last year, though signs of recovery are emerging.

The Railroad Commission of Texas said it issued 673 original drilling permits last month, which is 2 percent less than the same month last year. The state agency, which regulates fossil fuels in the state, reported 291 of those permits were for Midland County, host to some of the more lucrative shale basins in the country.


Texas is the No. 1 oil producer in the nation and, according to data provided by oilfield services company Baker Hughes, home to about half of the nation's inland exploration and production activity. Over the last 12 months, Texas produced 995 million barrels of crude oil and 8.1 trillion cubic feet of gas.

The average daily rate of production in September, the last full month for which the state has data, was nearly 2 percent lower than last year.

Lower crude oil prices had put strains on the state's economy, and companies working in Texas have been somewhat hesitant to invest heavily in exploration and production during the downturn.


Christi Craddick, a commission veteran and recently-elected chairwoman, said as recently as September, however, there were signs of recovery on the horizon, with the Permian shale basin in particular showing signs of strength even as pressure in the broader sector remains.

Sections of the Permian basin in eastern Texas are in Midland County. A report this week from S&P Global Platts finds the Permian shale basin in Texas may be the greatest benefactor from the recent rebound in crude oil prices, which are around $51 per barrel after dropping below $30 per barrel in early 2016.

Total oil production from Permian this year should average around 2 million barrels per day. If U.S. crude oil prices hold at around $50 per barrel at least, Platts estimates production could growth by at least 75,000 bpd next year.

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