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Petroleum Index Sees 18% Increase in Energy Industry Indicators

The Texas Alliance of Energy Producers said Wednesday that the Texas PetroIndex, which tracks 25 oil and natural gas industry indicators in 22 states, increased 18% in the first four months of the year over 2004.

The index measures oil and natural gas prices, rig counts, drilling permits, completions, output, employment, extraction employment and support employment, using as its base January 1995, which was 100. In April 1995, the index measured 99.4.

Last April, the index closed at 174.5, compared with 147.4 for April 2004. One boost to the index was the double-digit commodity price increases. Crude oil and natural gas prices remained strong in April 2005, up 50% for oil and 31% for gas over last year. The employment indicators also are stronger, with total oil and gas employment, on a seasonally adjusted basis, up 2.4%, while support employment grew 5.8%.

"Employment in all sectors of the industry has grown 9% since January 2004," said Alliance President Alex Mills. "We have 11,600 more employees than 18 months ago." However, Mills noted that even with the rise in employment, there continues to be a people and equipment shortage.

"The industry could put thousands of more people to work," he said. "Whether it's professionals or blue collar, we still have a shortage."

Many energy professionals left the industry following employment "crashes" in 1986, 1994 and 1998, Mills noted. By itself, Texas lost 26,000 energy sector jobs between January 1998 and July 1999, and the industry has never fully recovered. Although some have returned to the energy field, most of the professionals now are working in other sectors of the economy and are weary of the volatility in the oil patch, he said.

The Alliance, which was organized in 2000 through a merger of the North Texas Oil & Gas Association and the West Central Texas Oil & Gas Association, has about 2,665 members. The Alliance brings together members in 280 cities and 22 states, and it is the largest association of independent oil and gas producers in the nation. It publishes the PetroIndex on a monthly basis.

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