After the end of the Civil War, demand grew for kerosene and other petroleum products. At the same time, the vast grasslands in the Trans-Pecos and Permian Basin regions in West Texas were attracting farmers and ranchers. Because surface water was scarce, the settlers drilled water wells for their livestock, and they often found evidence of oil or gas. Nacogdoches County produced the first oil well, but due to a decline in prices no one was willing to continue financing the venture. In 1886, a Bexar County rancher drilling for water discovered a small quantity of oil, but not enough to justify additional development. In 1921, the first commercial oil well was completed in Mitchell County at a total depth of just 2,498 feet. By 1966, the Trans-Pecos and Permian Basin had produced a total of 607 million barrels of oil and 2.3 trillion feet of gas. Intrastate and interstate gas pipeline systems were expanded, and the Midland/Odessa area became the headquarters for the oil and gas industry in the region. Additionally, the largest inland petrochemical complex in the United States was established there. Today, in the 33 most active West Texas counties, there is a different trend. Rig counts across the United States are increasing, but the Trans-Pecos and Permian Basin have had up to a 39% decrease in active rigs from 2001 to 2002. Furthermore, the rig counts for January through May 2003 show a 1% to 2% decrease in districts 7B, 8 and 8A. Only District 7C has shown an increase, up 18% from 2001 to 2002. Leasing in West Texas also continues to shows signs of a weak economy. Companies are holding on to their capital, only venturing in areas where they feel most confident. West Texas leasing in the 33 most active counties has steadily decreased from 2000, when 5,228 leases were taken, down to 2,406 leases taken in '02. Activity has increased only slightly in first-quarter 2003. Pecos, Midland and Upton counties had the most leasing activity during the past three years, but Midland County still had more than a 67% decrease between 2001 and 2002. Permitting shows signs of an apprehensive industry, but activity has been increasing in the first part of this year. The Texas Railroad Commission reports that 198 permits have been approved in District 7B, West Central Texas, in January, February, March and April of this year. The totals for districts 7C, 8 and 8A are 424, 622 and 299 permits, respectively. If the current pace continues, 2003 will best 2002 activity and may even reach the 2001 level. It will take some time and more confidence in the economy for West Texas operators to regain the activity levels of the past, but perhaps the permitting data are indicating a turnaround. -J. Eric Williams, supervisor, digital lease data activity and processing, Tobin International Ltd.