Texas oil production higher, but data are mixed

Preliminary data show state oil production is up from 2017, but below peaks from earlier this year.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  May 30, 2018 at 6:56 AM
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May 30 (UPI) -- Preliminary data on crude oil production from the shale basins in Texas show a moderate increase from last year, a state regulator reported.

The Texas Railroad Commission, the state energy regulator, reported total state crude oil production in March, the last full month for which data are available, was 2.79 million barrels per day, an increase of more than a quarter million barrels from the same time last year.

Previous data paint a mixed picture. Assuming crude oil production for each calendar day, the average in January and February was closer to 3.3 million bpd.

Federal data, however, show expectations of an increase. The U.S. Energy Information Administration said it expects production from the Eagle Ford shale in Texas could increase to 1.4 million bpd by June. Production from the Permian shale, meanwhile, is on pace to hit 3.3 million bpd next month.

State data doesn't include condensate, an ultra-light form of oil found in many shale basins. The boundary of the Permian shale extends into neighboring New Mexico.

EIA data, meanwhile, show the number of drilled, but uncompleted wells, jumped in the Eagle Ford and Permian basins beween April and May. 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.

Economists at the Federal Reserve Bank of Dallas said the rising number of drilled, but uncompleted, wells in the Permian basin might indicate the reservoir could respond with a larger increase in production when market conditions are more favorable.

The bank last week reported the state's economy was in a period of strong growth in April.

"Activity in the energy sector expanded further, with both the rig count and oil prices increasing," the report read.

Payrolls in Texas improved by an annualized 4.2 percent in April. Employment in oil and gas extraction had the highest growth rate of any other economic sector in Texas.

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