A new report in Texas shows the state’s oil production is still breaking records as prices improve while there has been a decline in the Texas Petro Index.
The TPI is similar to the Energy Index in Oklahoma and is based on such things as rig count, drilling permits, well completions and employment. The latest March TPI released by the Texas Alliance of Energy Producers showed a decline in March.
“Typically, these E&P indicators decline during an observable, sustained contraction in oil and gas activity, but that doesn’t appear to be what we’re seeing now,” Karr Ingham, Petroleum Economist for the Texas Alliance of Energy Producers and creator of the TPI. “I do think these decreases can partly—even largely—be attributed to the sharp and unexpected fourth quarter 2018 crude oil price declines, but clearly there are other forces at work. These have become increasingly evident over the course of the current recovery and expansion from the 2014 to 2016 industry downturn.”
Texas has experienced four straight months of decline in its rig counts and the number of drilling permits in the first quarter is down by nearly five percent compared to a year ago. The number is also down 40 percent compared to early 2014.
The industry has seen other impacts such as the loss of 3,500 oil and gas jobs from December to March in the area of exploration and production. The sector’s March estimate is also down 70,000 compared to five years ago.
Despite the losses, the state’s crude oil production is growing, reaching five million barrels a day.