April 10 (UPI) -- The total number of original drilling permits more than doubled year-on-year in March, though commercial prospects may be lower, a Texas regulator reported.
Texas is the No. 1 oil producer in the United States and its Permian shale basin is considered more resilient to lower crude oil prices than other reservoirs. Texas exploration and production activity slumped early last year when crude oil prices dropped below $30 per barrel, but has since recovered with oil holding about $50 per barrel.
The Railroad Commission of Texas, the state's energy regulator, issued 1,310 original drilling permits in March, compared with 511 last year. That could indicate energy companies are willing to spend more on oil and gas opportunities in Texas as the market recovers.
Keith R. Phillips, a senior economist at the Federal Reserve Bank of Dallas, said the energy sector was showing signs of recovery and executives responding to surveys expected further improvement for 2017. That would spill over to the manufacturing sector, though a stronger dollar was hurting exports for Texas because that made products more expensive on the global market.
According to oilfield services company Baker Hughes, about half of the U.S. rig count, a reflection of exploration and production, took place in Texas last month.
In a potential sign of future production, total wells completed for 2017 are down 44 percent year-on-year to 1,925. Wells completed loosely equates to commerciality, with completions indicating an operation is close to actual production.
Including an ultra-light form of oil called condensate in its total for 2016, the Railroad Commission of Texas reported production in the state down 10 percent from the previous year. Preliminary data for January, the last full month for which data are available, show 85.2 million total barrels of oil produced, against 102.5 million year-on-year.
