TX Sees Decrease in Drilling | Russell T. Rudy Energy LLC
“Rigzone” reports that Texas, the leading oil producing state in the U. S., issued only about half as many drilling permits in November as in the previous month. While this decrease is widely attributed to the drop in oil prices, it still took several months to develop. Oil prices plunged in late June, but from August to September, permits increased significantly.
However, as it became evident that the price decline was not temporary, plans were revised and permit applications decreased slightly from September to October. November saw the biggest drop yet as the state issued only 1,508 permits, down from 3,046 in October.
If prices stay at current levels, we can expect operators to scale back investment plans for 2015. For example, Continental Resources Inc. has announced 40% spending cuts and a reduction in drilling rigs by about a third. This will be reflected in a smaller increase in 2015 production as opposed to 2014.
Fortunately, the U. S. Energy Information Agency sees this trend to increases in production, but at a slower rate, as being nationwide. It projects that production will increase from the current level of about 9 million barrels per day to 9.3 million during the coming year. While this is about 100,000 per day less than previous estimates, any increase should be seen as positive.
To read the article in its entirety, please go to www.rigzone.com/news/oil_gas/a/136498/StateTexas .
