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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 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.
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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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.