The Texas oil and gas industry shed 84,000 jobs during the Texas Petro Index’s 16-month decline from November 2014 through last month, the Texas Alliance of Energy Producers reported on Apr. 19.
The composite index, based on a comprehensive group of upstream economic indicators including upstream employment, measured in March at 170.7, down 40% year-over-year.
Since peaking at a record 313.3 in October and November 2014, the TPI has declined more than 45%. In November 2014, the combined value of Texas-produced oil and gas was about $9.4 billion, almost double their current value.
Crude oil production in Texas during March totaled an estimated 108.4 million bbl, 4.1% less than in March 2015. With oil prices in March averaging $34.58/bbl, the value of Texas-produced crude oil totaled about $3.75 billion, down 25% year-over-year.
Estimated Texas natural gas output in March was about 721.5 bcf, a year-over-year monthly decline of about 3.3%. With natural gas prices in March averaging $1.63/Mcf, the value of Texas-produced gas declined 41.5% to nearly $1.18 billion.
West Texas Intermediate averaged $34.58/bbl in March, nearly 28% more than the monthly average of $27.08/bbl in February. Karr Ingham, petroleum economist and TPI creator, cautions against reading too much into the recent oil-price spike given its lead up to the unsuccessful Doha production freeze meeting.
“Upstream industry employment in Texas will almost certainly continue to decline for most of the rest of the year,” said Ingham (OGJ Online, Mar. 3, 2016). “History suggests that employment will trough and begin to increase a good 6 months after prices reverse course.”
An estimated 222,000 Texans remained on upstream oil and gas industry payrolls, a decrease of 27.5% from a high of about 306,020 in December 2014. According to TPI estimates, the trough in upstream oil and gas industry employment in Texas before the expansion ending December 2014 was 184,640 in October 2009. During the previous growth cycle, industry employment peaked at 225,965 in October 2008.
Latest drilling drop
The Baker Hughes Inc. count of active drilling rigs in Texas averaged 221 in March, down from 492 in March 2015 and from a monthly average of 904 in November 2014. On Apr. 8, the statewide weekly rig count fell below 200 to 197—the lowest weekly total since June 1999 (OGJ Online, Apr. 8, 2016).
Drilling activity in Texas peaked in September 2008 at a monthly average of 946 units before falling to a trough of 329 in June 2009. In the most recent economic expansion, which began in December 2009, the statewide average monthly count peaked at 932 in May and June 2012.
The Texas Railroad Commission during first-quarter 2016 issued 1,594 drilling permits, the lowest first-quarter total in the history of the TPI, which began in January 1995. TRC issued 2,949 in first-quarter 2015, 5,367 in first-quarter 2014, and 5,775 in first-quarter 2013.