The Texas PetroIndex, an indicator of the economic vitality of the state's oil and natural gas exploration and production industry, inched higher in September to a record 219.1, up 15% from the 190.4 reported in September 2005. The growth marks the state's 49th consecutive month of improvement, but the Texas Alliance of Energy Producers (TAEP) noted the month-to-month increase of one tenth of 1% was the smallest in its sustained growth period.
The PetroIndex is issued monthly by the TAEP, offering a composite number compiled from more than 20 oil and gas industry economic indicators, including prices, rig count, drilling permits issued, well completions, production volumes, production values and employment figures. The snapshot was created by economist Karr Ingham, principal of Ingham Economic Reporting, who has been tracking Texas' upstream performance since January 1995.
"Due to retreating commodity prices and a statewide rig count that is likely to peak in the coming months, this spectacular four-year growth period may be beginning to lose vitality," said Ingham. "If the September PetroIndex really is signaling the beginning of the end for this historic oil and gas upturn, one can only hope the industry will settle into a period of price stability, accompanied by high levels of exploration and production activity."
The count of active drilling rigs in Texas during September averaged 787, a gain of 125 rigs compared with September 2005. Through the first nine months of this year, the active rig count in Texas averaged 733, about 34% higher than in the first eight months of 2005 and nearly three times the eight-month average in 1995, the base year. Through the first nine months, 14,668 drilling permits were issued, up from 12,556 for the same period of 2005.
The natural gas spot price index in Texas during September averaged $6.25/Mcf, 7 cents lower than in August and 31% lower than in September 2005. Year-to-date through September, gas prices in the state declined to an average of $6.49/Mcf, compared with $6.59 between January and August 2005.
To review the PetroIndex, visit www.texasalliance.org and click on "PetroIndex."
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