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Nearly Half of All U.S. Land Rigs Operational in Texas During September, RRC Reports

The Railroad Commission of Texas (RRC) reported the state had just under half of the active land rigs deployed across the United States in September, while one month earlier the number of original permits to drill in the state had increased more than 50%.

On Monday, the RRC reported that as of Sept. 19 the average rig count in Texas was 898, or about 48% of all active land rigs in the United States. The agency said that during the last 12 months, the state's total production was 820 million bbl of oil and 7.9 Tcf of natural gas. It estimated that final production for July would be about 82.6 million bbl of crude oil and about 540.6 Bcf of gas

According to the RRC, it arrived at the final production numbers by multiplying the preliminary production totals for July (about 69.6 million bbl of crude oil and 473.1 Bcf of gas well gas) by a production adjustment factor of 1.187 for crude oil and 1.1426 for gas well gas. The production totals do not include casinghead gas or condensate.

Natural gas storage reported to the RRC totaled about 273.6 Bcf in August, a 29.7% decrease from the 389.3 Bcf reported in storage during August 2013. The agency said it estimated September gas storage to be about 287.3 Bcf.

The RRC said its Oil and Gas Division set initial October gas production allowables for prorated fields in the state to meet market demand of about 8.59 Bcf. In setting the initial allowables for the month, the commission said it used "historical production figures from previous months, producers' demand forecasts for the coming month, and adjusted the figures based on well capability." The commission said initial allowables would be adjusted after October's actual production is reported.

In a separate statement Monday, the RRC said it had issued a total of 2,440 original drilling permits in August, a 51.9% increase over the 1,606 that it issued the preceding August. Of the 2,440 permits issued in August 2014, 2,209 were to drill new oil and gas wells, 37 were to re-enter existing well bores, and 194 were for re-completions.

Broken down by type, the August 2014 permit total included 705 for oil targets, 136 for gas, 1,485 for oil and gas, 103 for injection, two for service and nine for other purposes.

Preliminary crude oil production for July, according to the RRC, was about 69.6 million bbl (about 2.24 million b/d), a 33.1% increase from the approximately 52.3 million bbl (1.69 million b/d) produced in July 2013. Meanwhile, preliminary gas production totaled 632.5 Bcf (20.4 Bcf/d) in July 2014, a 10.7% increase over the 571.3 Bcf produced in July 2013.

Operators reported to the commission that they completed 2,157 oil wells in August, along with 303 gas wells, 92 injection wells and four other wells. They also reported plugging 342 holes. By comparison, operators reported completing 1,576 oil wells in August 2013, plus 500 gas wells, 18 injection wells and three other wells. They plugged 120 holes in August 2013 as well.

The RRC said Texas's production for July 2014 came from 166,437 oil wells and 93,308 gas wells. Year-to-date, total completions for 2014 are 20,657, a 20% increase over the 17,221 well completions recorded during the same period in 2013.

Broken down by RRC district, the commission's eighth district, which covers Midland, issued the most permits (784) to drill oil and gas wells. Midland also led in terms of oil completions (1,260), but District No. 1, which covers the San Antonio area, led in terms of gas completions (115).

According to the RRC, Karnes County topped the list of the state's top 10 counties in terms of preliminary oil production, at about 6.21 million bbl. La Salle County was a distant second at 4.88 million bbl, followed by De Witt County at third with 4.47 million bbl. Rounding out the list were McMullen County (3.17 million bbl), Gonzales County (3.11 million), Andrews County (2.93 million), Upton County (2.55 million), Dimmit County (2.44 million), Martin County (2.38 million) and Ector County (2.34 million).

Meanwhile, at 55.5 Bcf Tarrant County led the list of top 10 counties in terms of preliminary gas production in July. Webb County was second at 39.5 Bcf, followed by Johnson County (27.7 Bcf), Panola County (25.0 Bcf), De Witt (23.7 Bcf), Wise County (21.2 Bcf), Dimmit (20.3 Bcf), La Salle (18.3 Bcf), Denton County (18.0 Bcf) and Karnes (17.8 Bcf).

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