Texas's energy regulator issued fewer new drilling permits in March than a year ago, but well completions rose, according to data released on April 6 by the state.
A total of 1,220 original permits were issued last month, down about 7% from the same time last year. Roughly half of the permits were for oil and gas wells in the Midland area, home to the country's most active shale area, the Permian Basin.
The number of completions processed by the Railroad Commission, which regulates the state's oil and gas industry, climbed sharply this year, a sign that producers were ramping up hydraulic fracturing activities and working through a backlog of drilled but uncompleted wells, or DUCs.
The Railroad Commission has processed 2,712 well completions so far this year, compared with 1,925 in the same period last year. Last month, 656 oil completions were processed vs. 586 the same time last year, according to the data.
Although completions in Texas rose, the number of DUCs in the Permian also continued to rise, according to data from the U.S. Energy Information Administration. As of February, there were 2,937 DUCs in the region, a gain of 122 from the month prior, the EIA said in its latest Drilling Productivity Report.
About half of all active drilling rigs in the U.S. are operating in Texas, according to data from Baker Hughes Inc. (NYSE: BHGE), GE's energy services firm.
A boost in oil prices above $60 a barrel has enticed oil and gas companies to ramp up activity, with drillers adding 11 oil rigs last week, bringing the total to the highest level since March of 2015.
On April 6, benchmark U.S. crude futures declined more than 2% to under $62 a barrel after U.S. President Donald Trump threatened to levy new tariffs on China, further stoking fears of a trade war.
Recommended Reading
E&P Highlights: April 29, 2024
2024-04-29 - Here’s a roundup of the latest E&P headlines, including a new contract award and drilling technology.
Kosmos Energy’s RBL Increased, Maturity Date Extended
2024-04-29 - Kosmos Energy’s reserve-based lending facility’s size has been increased by about 8% to $1.35 billion from $1.25 billion, with current commitments of approximately $1.2 billion.
Barnett & Beyond: Marathon, Oxy, Peers Testing Deeper Permian Zones
2024-04-29 - Marathon Oil, Occidental, Continental Resources and others are reaching under the Permian’s popular benches for new drilling locations. Analysts think there are areas of the basin where the Permian’s deeper zones can compete for capital.
NOV Announces $1B Repurchase Program, Ups Dividend
2024-04-26 - NOV expects to increase its quarterly cash dividend on its common stock by 50% to $0.075 per share from $0.05 per share.
Repsol to Drop Marcellus Rig in June
2024-04-26 - Spain’s Repsol plans to drop its Marcellus Shale rig in June and reduce capex in the play due to the current U.S. gas price environment, CEO Josu Jon Imaz told analysts during a quarterly webcast.