State data show the number of permits issued for drilling in Texas is almost double the level from last year. File Photo by ekina/Shutterstock
Feb. 13 (UPI) -- The number of new drilling permits issued in Texas last month was more than 80 percent higher than the previous year, state data show.
Texas is the No. 1 oil producer in the state and accounts for about half of all the drilling activity in the country. Preliminary data from the Railroad Commission of Texas, the state oil and gas overseer, show 81.5 million barrels of oil produced in November, about 1 million barrels less than the previous month.
The Texas energy sector, as well as the state economy, was under pressure for most of last year because of a downturn in crude oil prices. Since late last year, crude oil prices recovered in response to a decision from the Organization of Petroleum Exporting Countries to control production levels and overall spending in the energy sector has increased in kind.
Data from oilfield services company Baker Hughes show Texas added seven rigs for the week ending Feb. 10, a sign that energy companies are spending more on exploration and production.
In January, the Railroad Commission issued 956 original drilling permits, compared with 510 in January 2016. Nearly all of those were for new oil or gas wells.
Drilling reflects an improved appetite for spending more than a potential for increased production. November's production figures, however, were published before OPEC agreed to a managed decline.
After expressing some concerns on the economic front last year, a late January report from the Federal Reserve Bank of Dallas perceptions of the state economy in general "continued to reflect optimism in January."