Texas Petroleum Industry OK Despite Economic Downturn

November 5, 2008 at 10:04 pm Leave a comment

Declining oil and gas prices during September failed to discourage drilling and production activity in Texas, propelling the Texas Petro Index to a new high for the 20th consecutive month, according to the Texas Alliance of Energy Producers, the largest state oil and gas association in the nation.

“Independent oil and gas producers continue to drive activity levels upward, despite the fact that both crude oil and natural gas wellhead prices were lower in September than in either July or August,” said petroleum economist Karr Ingham, who created the Petro Index in 2003. “Other measures of upstream activity-drilling permits, well completions, the rig count, employment-remained very favorable compared to year-ago levels.  However, these indicators should be watched closely in the coming months, especially if prices fall closer to producers’ finding and production costs.”

A composite index based upon a comprehensive group of upstream economic indicators, the Texas Petro Index in September reached 282.3, up from 279.6 in August 2008 and nearly 50 points higher than the composite score of 234.7 reached in September 2007.  Of special note:

The Baker Hughes rig count in Texas averaged 946 during September, 13 percent more than in September 2007; the year-to-date average through September was 902 rigs, about 9.5 percent ahead of the pace a year ago.

The Railroad Commission of Texas issued 2,235 drilling permits during September, up 63.3 percent from the 1,430 permit issued in the same month last year; permits issued year-to-date through September totaled 18,637, 23.4 percent more than during the first nine months of 2007.

About 226,000 Texans were employed in the Texas oil and gas industry during September, 8.7 percent more than during September 2007.  Industry employment in September 1995, the base year of the Petro Index, totaled about 149,300.

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