Friday, March 7, 2014

FEB Texas Drilling and Permits: Activity Steady, Oil Dominates

The Texas Railroad Commission released the February Drilling, Completion, and Permitting Report today.  Permitting activity in February was steady, with new-drill permits of 1,547, comparable to Jan '14 (1,577) and to Feb '13 (1,551).  Completion paperwork continues to be filed late by operators, particularly oil drillers, with over 3,500 completions reported in Feb, more than double the recent rate of permitting.  This is further evidence that activity in Texas was much greater in 2013 than the numbers indicated at the time.  Gas well permitting also continued to decline, with only 72 gas well permits issued, the lowest in recent history.

Mapping gas completions 2012-Present with reported gas rig counts over the same period show that completion reporting is not a very accurate indicator of activity in any given month.  Horizontal gas rig counts have been slowly declining for the last year, falling from about 140 to the present 82 rigs, while monthly reported gas completions have ranged from 574 to 156.