A new composite index of 25 indicators shows that the Texas oil and gas industry is poised for an upswing. Growth is foreseen through the balance of this year, according to a new benchmark devised by the Texas Alliance of Energy Producers and Wells Fargo Bank. "It appears the industry is in full recovery from the oil economy crash of 1998 and the recession of 2002," said Karr Ingham, an oil industry economist and president of Ingham Economic Reporting, when introducing the new index to the media. Updated data will be made available monthly at TexasAlliance.org. Ingham created The Texas Alliance/Wells Fargo Petroleum Index with a baseline of January 1995, starting at 100. It is composed of a comprehensive group of data with the heaviest weighting given to oil and gas prices, the Lone Star State's rig count, drilling permits filed and industry employment figures. Oil and gas well completion numbers, production volumes and dollar production values are also included. Since January 1995, the index has been on a wild ride. It climbed nearly 20% to 119.6 in November 1997, then plunged more than half, to a low of 83.7 in June 1999. It came roaring back to a high of 142.8 in August 2001. In March 2003, it was at 128.1. "There just doesn't seem to be any period where there is neither growth nor decline, but some kind of plateau of stability," said Ingham. "'In the long run' has ceased to exist due to the volatility. People respond to prices now so we can't get off this roller-coaster." Texas is undergoing a transformation due to megamergers, falling employment and a change in what drilling rigs pursue, Ingham said. Crude oil production has declined precipitously since 1995, while gas production has held nearly constant. "Texas is changing from an oil state to a gas state," Ingham said. The data bear him out. Comparing March 1995 with March 2003, Texas oil completions fell almost 29%, but gas completions rose 35.1%. Oil production fell from 45 million barrels per month in 1995 to about 30 million per month today. Although the index reflects a lot of historical year-to-date data and averages, it does have some predictive quality to it, said Tim Murray, executive vice president and energy group manager, Wells Fargo, Houston. "Drilling permits are predictive, certainly in the short-term, because they reflect the financial capital that will be deployed, and employment indicates the human capital being deployed." The Texas Alliance, formed in 2000 by the merger of the North Texas Oil & Gas Association and the West Central Texas Oil & Gas Association, has about 2,000 individual and company members. -Leslie Haines