Texas oil production in February increased slightly from last year

Total crude oil output higher, though the state's Permian shale outperforms, data shows.
By Daniel J. Graeber  |  April 27, 2017 at 6:16 AM
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April 27 (UPI) -- Preliminary data from Texas show total crude oil production for February was slightly more than figures from the same time last year, a regulator reported.

The Railroad Commission of Texas, the state energy regulator, reported a preliminary crude oil production volume of 70.3 million barrels for February, against the preliminary output of 70.2 million barrels in February 2016. Oil production figures from the commission don't include condensate, an ultra-light form of oil found in some shale deposits, and last February's preliminary data was updated to 82.7 million barrels.

Texas is the No. 1 oil producer in the United States and home to shale basins seen as more resilient to the relative low price for crude oil than elsewhere in North America. Lower crude oil prices has curbed spending on exploration and production, though activity, reported as rig counts by oilfield services company Baker Hughes, has moved steadily higher this year.

For the week ending April 21, Baker Hughes reported Texas gained six rigs. Rig activity in the state is more than twice what it was last year, though there's a notable time between when rig deployment translates to actual production.

A drilling productivity report from the U.S. Energy Information Administration finds one Texas shale oil reservoir in particular, the Permian basin, is recovering quickly as oil prices settle in at around $50 per barrel. May output is expected at about 2.4 million barrels per day. For all but three months since January 2016, production from Permian shale has increased.

"With rising oil prices over the past year, the Permian continues to be attractive to drillers, as reflected in rising rig counts," a daily report from the EIA read. "As of April 21, the number of rigs in the Permian Basin reached 340, or 40 percent of the 857 total oil- and natural gas-directed rigs operating in the United States."

In a potential sign of future production, however, total wells completed for 2017 are down 44 percent year-on-year to 1,925. Wells completed loosely equates to commercial prospects, with completions indicating an operation is close to actual production.

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