HOUSTON -- The Texas Petro Index (TPI), a composite index of statistics reflecting the state’s oil production, finished 2013 on a high note, according to its creator, economist Karr Ingham, who maintains it monthly. Last year in Texas, growth cycles in the energy industry — oil production and sector jobs, mainly — were driven by a good crude oil cycle. Ingham recapped the TPI Jan. 29 at the Houston Petroleum Club.
The TPI ended 2013 above its 2012 ending numbers, with a 6.7% rise.
“By our estimates, statewide crude oil production grew by about 21%” last year “compared to 2012,” said Ingham. The crude oil growth spurt helped support a large percentage increase year-over-year for natural gas, in both production and monetary value. But natural gas production declined slightly, while crude’s production increased. Additionally, despite the high note struck by job growth, several thousand less drilling permits were issued as compared to 2012.
The state “certainly had a decent year in terms of crude oil pricing, as it turns out a level very favorable to sustaining high levels of E&P activity across the state and those regions of the state where activity levels have just exploded, which is to say, the Permian, the Eagle Ford, to a lesser extent the Panhandle and other production regions of the state,” said Ingham.
Texas produced roughly 856.8 million barrels of oil last year, Ingham said. This is a 21.2% increase over 2012’s 706,903 barrels, according to a chart.
In dollars per year, 2013’s oil production was worth almost $81 million. This is a $27% increase over 2012’s $63,766,884.
While crude had a staggering production apex, natural gas production fell just 1% from 2012’s 8,067,460 million cubic feet (Mcf), landing at 7,929,812 Mcf.
Drilling permits decreased in 2013 compared with the previous year. The Texas Railroad Commission (TRC) issued 21,471 permits last year, compared with 2012’s 22,479. Despite this, production activity is staggering. The TPI’s close of 295 exceeds the 2008 record peak of 287.6.
Extraction activity jobs are employing more than 111,000 people, above 2012’s 100,700 despite the smaller number of drilling permits handed out.
Overall, Texas had a good year in oily and gaseous raw materials, driven by crude and boosted in part by higher wellhead prices for natural gas, though that product’s value declined slightly.
Looking ahead, Ingham says it’s possible for 2014’s crude oil prices to fall, based on supply and demand. The extended cold snaps this winter “are a natural gas producer’s dream,” he said, adding that “the price goes up when this happens.” Higher natural gas prices could be the next trend.