An index of oil and natural gas upstream activity in Texas reached a new high for February with increasing production -- for oil the highest since 1980 -- higher commodity prices at the wellhead following along with a booming workforce.
The Texas Petro Index hit a record 300.6 for February, according to Karr Ingham, the economist who created the index and maintains it for the Texas Alliance of Energy Producers.
"Texas producers increased oil output by more than 22% in February compared to February 2013, and natural gas production was up about 1.0%," Ingham said. "Combined with higher wellhead prices for both commodities, the value of oil and gas produced in Texas during February increased by more than $2.85 billion in the past year to about $10.63 billion."
Texas producers recovered about 2.75 million b/d of crude oil during February, which is "the most since 1980."
Ingham said revised statewide employment estimates by the Texas Workforce Commission (TWC) indicated that the oil and gas industry continues to hire workers at "an impressive pace," faster than even the stout growth of prior years.
"In 2012, workforce commissioners revised total upstream payroll employment upward by about 3,200 jobs to more than 270,000 jobs, which reflected a growth rate of 10.2% at year-end compared to year-end 2011," Ingham said. "In 2013, another 10,000 jobs were added to upstream oil and gas company payrolls, and that job growth has escalated in early 2014.
"At year-end 2013, the year-over-year rate of industry employment growth was about 3.7%; in February, the year-over-year rate of industry employment growth was nearly 5%, with about 13,400 jobs added over the last 12 months," he said. "Since the industry downturn in 2009, about 103,000 jobs have been added to upstream oil and gas company payrolls."
A composite index based upon a group of upstream economic indicators, the Texas Petro Index in February moved above 300.0 for the first time to a record 300.6, up 7.6% compared to February 2013.
Crude oil production in Texas was an estimated 77.2 million bbl, about 14.1 million bbl (22.4%) more than in February 2013. The value of Texas-produced crude oil was $7.48 billion, 29.2% more than in February 2013.
Estimated Texas natural gas output was more than 625.2 Bcf, a year-over-year monthly increase of about 1.1%. With natural gas prices in February averaging 5.04/Mcf -- an increase of about 55.6% compared to the average wellhead price of $3.24/Mcf in February 2013 -- the value of Texas-produced gas increased 57.3% to about $3.15 billion.
The Baker Hughes count of active drilling rigs in Texas averaged 844, compared to 833 in February 2013. Drilling activity in Texas peaked in September 2008 at a monthly average of 946 rigs before falling to a trough of 329 in June 2009. In the current growth cycle, the statewide rig count peaked 932 in May and June 2012.
The number of Texans on oil and gas industry payrolls averaged a record 285,000, according to statistical methods based upon TWC estimates, about 4.9% more than in February 2013. Record-setting estimated oil and gas industry employment in February replaced the record estimate of 282,700, set in August 2013. The most recent low ebb in industry employment, 179,200, occurred in October 2009. During the previous growth cycle, industry employment peaked at 223,200 in November 2008.