Texas Petro Index shows stability, modest growth

Power lines and pump jacks dot the horizon in the Permian Basin just west of Midland, Texas.

Stable crude oil prices, modest gains in drilling rig counts and a growing number of drilling permits added up to modest growth in Texas oil and gas activity as measured by the Texas Petro Index for the first four months of the year.

The index, a measure of upstream economic indicators prepared for the Texas Alliance of Energy Producers by economist Karr Ingham, shows that oil and gas exploration and development has stabilized at relatively high levels, while sustaining modest growth.

Ingham said the index indicated activity “languishing” in the latter half of 2012, after overheated growth during the first half of last year.

It grew in each of the first four months of 2013, he said.

“Crude prices appear to have stabilized in the $90 per barrel range,” he said in a statement. “The rig count has posted modest increases, and the number of drilling permits issued through April exceeded the record-setting pace of 2012.”

There aren’t “dramatic month-to-month increases,” he said. “However, the outcome is that aggregate oil and gas exploration and production activity have stabilized at a very high level.”

It’s dangerous to assume the stability will last, Ingham said. “But it is the case for now.”

Among the factors Ingham considered for April:

 Crude oil production in Texas totaled 57.6 million barrels, 8.5 percent more than in April 2012. Wellhead prices averaged $88.33 per barrel, 11.2 percent below April 2012 prices. Production gains failed to offset the lower prices, decreasing the value of Texas-produced crude by $5.1 billion. Texas natural gas output was 642.5 billion cubic feet, a year-over-year monthly decline of 1.5 percent. Prices averaged $3.90 per thousand cubic feet, 88.6 percent more than in April 2012, more than offsetting the production decline to boost the value of Texas-produced gas to $2.5 billion.

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