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Crude oil output in Texas averaged 2.4 million barrels per day in August, up by 0.5 percent on the year, according to data from the state’s energy regulator, the Railroad Commission of Texas. The August data are the latest complete set of monthly figures for the largest oil producer in the U.S.
Over the last 12 months, total oil production in Texas reached 1 billion barrels, with the state’s Federal Reserve Bank reporting that sentiment in the local energy industry has begun to improve as international prices started to rise. The Texas Fed said that it had conducted a survey among oil and gas businesses in the state and had found that there were signs of a recovery, but worry about the global glut was still rife.
Texas is home to the most popular shale play in the country right now—the Permian Basin—which is attracting both energy vets and private equity investors because of its low-cost production. It was in the Permian that the E&Ps first started to add drilling rigs after a prolonged lull due to prohibitively low oil prices.
Operators in the Permian have two things going for them that are unique to that play: the easier accessibility (hence low production costs) of the crude, and its prodigious volume.
Texas is also home to the Eagle Ford shale, which although staying out of the spotlight for the last couple of years, is anything but ready to call it quits. A recent study from the University of Texas’ Jackson School of Geosciences has revealed that there are recoverable reserves of 10 billion barrels of crude in the Eagle Ford, along with 34 trillion cubic feet of natural gas. These reserves, the researchers note, can be extracted at today’s prices, while total potential reserves are 230 billion barrels of oil and 462 trillion cubic feet of gas.
Generally, the mood in Texas is optimistic, with the industry expecting to see further signs of improvement. Unless OPEC’s freeze deal fails, that is, and prices plunge back compromising even the Permian.
By Irina Slav for Oilprice.com
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Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.