The number of oil and gas drilling permits in Texas fell by a third in June from a year earlier, the state’s oil and gas regulator body said on Tuesday.
The Texas Railroad Commission (RRC) issued 312 drilling permits last month, compared to 1,001 permits issued in June of last year. Of those 312 permits, 262 were to drill new oil and gas wells. The rest of the 312 were for re-entering plugged well bores and re-completions of existing well bores.
While permits for new drilling were down significantly in June year on year, completions processed year to date in 2020 for new drills were 7,930—up from 5,050 during the same period last year.
The RRC cautioned, however, that due to new technology which is allowing it to report more detailed data on drilling permits, data for previous years may not correlate exactly to the same results this year.
For new oil and gas permits, the Midland district saw the lion’s share, with 157 permits out of the 262 total for June. The Midland district also saw the highest number of new oil completions, at 538 out of the total 963, and new gas completions at 147 out of the total 340.
According to a recent Dallas Fed survey, energy executives in Texas feel that the price of WTI would need to be above $35 before they restart wells. WTI is now above $40 per barrel.
Rystad’s outlook back in February was that oil production in Texas would rise nearly every month this year thanks to the Permian basin, after reaching 5.4 million bpd in December 2019. Those forecasts were promptly shot down in the wake of the coronavirus pandemic and oil price war which saw U.S. oil production and jobs plummet in the months that followed.
By Julianne Geiger for Oilprice.com
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