May 10 (UPI) -- Though Texas drilling activity is increasing, state data show the number of wells actually completed so far this year is down by almost half.
The total number of rigs deployed in Texas, the No. 1 oil producer in the United States, was 443 as of May 5, accounting for about half of all the rig activity in the country. Rig counts serve as a loose gauge of industry interest in spending on exploration and production and the latest Texas rig count is more than double the amount for last year.
Crude oil prices have moved beneath the threshold of $50 per barrel in a sign of waning optimism over the strength of the market. A decision by the Organization of Petroleum Exporting Countries to balance an oversupplied market through managed declines had supported stronger oil prices, though continued production gains in the United States and elsewhere are offsetting OPEC's efforts.
The Permian shale basin in Texas is considered one that's more resilient to the type of depressed market that sidelined investments last year. The latest drilling productivity report from the U.S. Energy Information Administration shows considerable gains in output from Permian shale.
The Texas Railroad Commission in Texas, the state oil and gas regulator, said it issued 821 new permits to drill for oil or natural gas in April, up about 30 percent last year.
"Total well completions processed for 2017 year to date are 2,455; down from 4,499 recorded during the same period in 2016," the commission reported.
Wells completed loosely equates to the prospect for commercial operations, with completions indicating an operation is close to actual production. Uncompleted wells could indicate a potential slowdown in Texas production, though economists at the Federal Reserve Bank of Dallas said the rising number of drilled, but uncompleted, wells in the Permian basin could indicate the reservoir could respond with a larger increase in production when market conditions are more favorable.
Variances in efficiency, whereby completing a small number of higher-producing wells versus a large number of lower-producing wells, could influence future production in either direction.
Federal estimates put total crude oil production for the year at 9.3 million barrels per day, rising to 10 million bpd by next year.