The number of oil and gas wells in Texas readied for production fell nearly 12% in the first seven months of 2019 compared with the same time last, according to data from the state energy regulator, as activity dropped on concerns of slowing demand and oversupply.
Producers completed 5,749 wells in Texas from January to July versus 6,514 in the same period last year, the Railroad Commission of Texas said on Aug. 16. Completion means the wells are ready to start producing.
Permits to drill new wells in the largest U.S. oil-producing state also declined this year, falling by about 14% to 7,166 in the first seven months of the year from 8,330 last year.
The declines have hurt companies that provide hydraulic fracturing and other services to energy producers. Many pressure pumping firms raced to build or acquire new equipment in recent years on hopes that producers would begin working through a build-up of drilled-but-uncompleted (DUC) wells.
Shares of pressure pumper Liberty Oilfield Services this week fell to a record low of $10.96, less than half its peak of $23.90 in May 2018. Rival ProPetro traded down to $10.91 this week, near a record low and 57% below its peak in April 2019.
Across the United States, the total number of DUCs is anticipated to have fallen by about 100 in July to 8,108, according to estimates from the U.S. Energy Information Administration (EIA). The only major U.S. shale field still adding to its DUC backlog is the Permian Basin, which stretches across West Texas and eastern New Mexico.
In the Permian, the number of DUCs is expected to rise by 9 in July to 3,999, the EIA said in its latest Drilling Productivity Report.
Department of Energy is ready to respond if a release from the Strategic Petroleum Reserve is needed, he says.
Secretary of state believes that the US can continue with the strategy.
Crude oil is included on the latest list of US exports to face a tariff.