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Oil Plunges To $35 As Lockdowns Return

Oil Plunges To $35 As Lockdowns Return

Oil prices extended their 5-percent…

Shale Towns In Texas Boom As Oil Supermajors Settle In The Permian

The towns in the heart of the Permian in West Texas—once notoriously known as boom or ghost towns depending on the price of oil and drilling activity—have seen steady growth since 2017 and look to expand community and school services as the boom hasn’t been affected by the recent oil price slide.

Schools in the towns of Midland and Odessa need more buildings to house more students and Odessa is even thinking of buying a hotel to house the new teachers that the schools need, Reuters correspondent Jennifer Hiller reports.  

This time, unlike in previous boom-and-bust cycles, residents and local authorities believe that the boom will continue as the biggest U.S. oil companies are betting on the Permian to grow their production volumes.

Earlier this year, both Exxon and Chevron announced increased targets for their Permian oil production. Chevron now sees its Permian unconventional net oil-equivalent production rising to 600,000 bpd by the end of 2020, and to 900,000 bpd by the end of 2023. Exxon revised up its Permian growth plans to produce more than 1 million oil-equivalent barrels per day by as early as 2024, which would be an increase of almost 80 percent.  

Even though smaller shale drillers have started to show signs of slowdown in drilling activity in the Permian, locals in the towns of Midland and Odessa see the supermajors coming to the shale region as providing more sustainable growth and development in these boom-and-bust cities.

Related: Oil & Gas Industry Leads Forbes Profit Growth List In 2019

Midland, for instance, has grown a lot in terms of job creation, leading to much higher house prices than in the rest of Texas, excluding Austin. The median home value in Midland is US$261,900, up by 12.9 percent over the past year, as per data from real estate and marketplace Zillow, which expects house prices to go by another 5.3 percent over the next year and rates the Midland housing market as ‘very hot.’

According to data from the Texas A&M University Real Estate Center compiled by Reuters, the median Midland home price is $305,000, compared to $117,000 for the median Texas house price.  

Last year, Midland saw the largest over-the-year percentage gains in nonfarm payroll employment in the U.S.—at 6.7 percent, according to the Bureau of Labor Statistics. 

By Tsvetana Paraskova for Oilprice.com

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  • Lee Huling on August 23 2019 said:
    In 1918, an astute relative began accumulating a 1440 acre mineral rights deed for a family trust. 100 yrs later the mineral deed was sold, the trust was dissolved, and the beneficiaries rec'd a greater endowment due to the amazing Permian Basin discovery.
    Family lore had previously deemed it the "oil well" and it became a fading topic of conversation between older heirs when hope turned into disappointment after a major oil company stopped drilling, then ceased all leasing options in the mid 1970s.
    "When the oil well comes in" was my generation's scoffing reaction of its potential worthlessness in the pile of the dismantled, discarded derrick and old drill rigging.
    But it did come in, not in performance of a gushing well, yet certainly in an unexpected and very much blessed amazing manner. Keep hope alive/Never give up.

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