Oil and natural gas well permits in Texas have declined through the first seven months of 2019 compared with the same time last year, according to state data.
The Railroad Commission of Texas (RRC) issued 912 drilling permits last month, down from 1,001 in June and from 1,153 in July 2018. RRC had issued 7,166 drilling permits through the first seven months of the year, compared with the 8,330 issued over the same period in 2018.
Oil, gas and injection well completions also declined in July to 699 from 940 over the same time last year, according to RRC data. The decline in activity comes as operators across the country curb spending and activity in response to a variety of factors, including volatile commodity prices, more prudent investors and, especially in Texas, limited pipeline capacity for booming oil and associated gas production in the Permian Basin.
Data compiled by Evercore ISI showed that in July, oil and gas permits across the Lower 48 declined by 13.7% from June.
However, most of the Lower 48 activity is concentrated in the Permian, and RRC data showed that more than half of the permits issued in July, or 487, came from its Midland District in West Texas. The same was true for completions, with the district processing 459 completions last month. The rest of the permits were mostly issued in districts across South Texas, where Eagle Ford Shale development is dominant.
RRC said of the 912 permits it issued in July, 836 were for new oil and gas wells, while 68 were for recompletions and eight were to re-enter plugged well bores. RRC also noted that the 450 rigs currently running across Texas represent about half of all the country’s active rigs.