American Oil and Gas Reporter - September 2017 - 22

IndustryDigest
Texas Petro Index Is Up
For Eighth Straight Time
WICHITA FALLS, TX.-Sizable
year-over-year improvements in the rig
count, drilling permits and the value of
Texas-produced crude oil and natural
gas, as well as renewed industry
employment growth, pushed the Texas
Petro Index upward in July to 176.9, the
eighth straight monthly increase since a
24-month contraction dropped the TPI
to 149.2 in November 2016, according
to the Texas Alliance of Energy
Producers.
The Alliance notes the Petro Index
was 1.7 percent higher in July than the
revised TPI of 173.9 for June, and was
14.9 percent higher than July 2016,
when the TPI stood at 154.0.
"Oil and gas producers in Texas and
across the United States responded
swiftly to wellhead price increases that
occurred when the Organization of
Petroleum Exporting Countries and
other oil-producing nations agreed to
curb output," reflects economist Karr
Ingham, who created and maintains the
TPI for the Texas Alliance.
"OPEC production curtailments did
not achieve the desired price outcome,
and once again Texas and the United
States are the chief offenders-and I say
that with great pride," Ingham
continues. "Oil supplies remain

plentiful because domestic producers
are becoming increasingly efficient at
producing crude at lower costs, so a
$45-a-barrel oil market provides more
incentive than in the past."
Ingham says he sees few reasons for
U.S. oil production to decline because
more producers can compete when oil is
in the $45 range. "But make no mistake,
U.S. producers-and Texas producers, in
particular-have backed OPEC and other
producers around the world into a
corner from which there seems to be no
easy escape," Ingham remarks.
"Where all this may take us in terms
of prices and global markets, no one
knows," he adds. "But Texas producers
have flexed their muscles, not only in
the expansion of 2010-14, but over the
course of the contraction as well,
leaving OPEC utterly confounded and
the U.S. squarely in the driver's seat."
Ingham recalls the TPI peaked at a
record 318.1 in November 2014, which
marked the zenith of an economic
expansion that began in December
2009, when the TPI stood at 190.2.
Highlights of the July Texas Petro
Index include:
* Texas crude oil production totaled
103.5 million barrels, 5.7 percent more
than in July 2016. With oil prices in
July averaging $43.10 a barrel, the
value of Texas crude oil came to
slightly more than $4.46 billion, 9.6

Flanking Gary W. Willingham (center), executive vice president of operations for Noble
Energy and the keynote speaker at the Texas Independent Producers & Royalty Owners
Association's summer conference, are, from left, TIPRO President Ed Longanecker,
former association Chairman Raymond James Welder III, current TIPRO Chairman Allen
Gilmer and former association Chairman David F. Martineau. The TIPRO event was held
Aug. 9-10 at the Hyatt Hill Country Resort outside San Antonio, Tx.

22 THE AMERICAN OIL & GAS REPORTER

percent more than in July 2016.
* Texas produced nearly 700 billion
cubic feet of natural gas, a year-overyear decline of 3.5 percent. With
natural gas prices averaging $2.84 an
Mcf in July, the value of Texasproduced gas increased 2.3 percent to
nearly $1.9 billion.
* The Baker Hughes count of active
drilling rigs in Texas averaged 464
units, 125.2 percent higher than in July
2016 when an average of 206 rigs were
working. Drilling activity in Texas
peaked in September 2008 at a monthly
average of 946 rigs before falling to a
trough of 329 in June 2009. In the
economic expansion that began in
December 2009, the statewide average
monthly rig count peaked at 932 in May
and June 2012.
* The number of original drilling
permits issued was 1,011, 60.2 percent
more than the 631 permits issued in July
2016.
* An estimated average of 212,667
Texans were on upstream oil and gas
industry payrolls, 9.9 percent more than
the revised average of 193,510 in July
2016, but 28 percent fewer than the
high of 295,168 in December 2014. r

Texas RRC Identiﬁes
Groundwater Protection
Zones In North Texas

WICHITA FALLS, TX.-The Texas
Railroad Commission has released an
areawide groundwater protection
determination for 14 north-central
Texas counties as part of its Oil Field
Relief Initiative, the Texas Alliance of
Energy Producers reports.
The Alliance explains that normally,
operators must obtain well-specific
groundwater protection determinations
from the RRC's Groundwater Advisory
Unit (GAU) prior to drilling. These
determinations identify the depth to
which surface casing must be set and
cemented to protect freshwater.
However, as part of its Oil Field
Relief Initiative, which was launched in
August 2016, the Alliance says the
GAU has identified areas with
consistent groundwater protection
depths in Archer, Baylor, Callahan,
Foard, Haskell, Jones, Knox,
Shackelford, Stephens, Taylor,
Throckmorton, Wichita, Wilbarger and
Young counties.
American Oil and Gas Reporter - September 2017

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