Wednesday, January 29, 2014

Texas Oil and Gas Drilling and Permitting

Since almost half of the U.S. land rig count operates in Texas, it is useful to review the Texas Railroad Commission Monthly Drilling and Completion Summary.  The reports are issued within ten days of month end for the previous month.  (See NB below the chart).  December 2013 highlights:

  • After nine months where drilling outpaced permits, more new drill permits were issued (1,472) than well completed (1,410).
  • Gas completions were flat MOM, at a low level (129), after averaging 443 per month in MAR-OCT.  Other than the Barnett, where dry gas drilling fell off noticeably in '13, it is likely that operators are coding many of their completions as oil based on prevailing economics.
  • Total completions were down, typical for DEC but continuing a steep downward slope since reaching a high of 2,738 in MAY.  

NOTA BENE:  New drill permits in Texas are of 3 kinds (Oil, Gas, Oil+Gas), but completions are either Oil or Gas.  This ambiguity leaves the discretion to the operator, and in basins such as Eagle Ford and Granite Wash, well production can include substantial volumes of both oil and gas.

Download this report as a PDF