Strong drilling, production and permitting activity drove the Texas Petro Index (TPI) to another record in September, with oil and gas industry employment hitting its highest level since the index was founded in 1995.
Lone Star State oil production was nearly 95.6 million bbl in August, up from 77.6 million bbl in August 2013, a 23.2% increase. With crude oil prices in August averaging $92.70/bbl, the value of Texas crude was nearly $8.86 billion, 22% more than the year-ago period, said Karr Ingham, the economist who compiles the TPI for the Texas Alliance of Energy Producers.
Texas natural gas output was more than 703.7 Bcf in August, an increase of 0.5% from a year ago. "With natural gas prices averaging $3.74/Mcf, the value of Texas-produced gas increased 8% to about $2.63 billion," Ingham said.
And the Baker Hughes tally of active drilling rigs averaged 900 for the first time since August 2012, a 6.1% increase from 848 active rigs in Texas one year ago. "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," Ingham said. "During the current economic expansion, the statewide average monthly rig count peaked at 932 in May and June 2012."
All this drove the number of Texans on oil and gas industry payrolls to a new index record of 307,700, according to Ingham's analysis of Texas Workforce Commission data. Industry employment is up about 8.3% from a year ago. "Upstream oil and gas industry employment in Texas has increased steadily since falling to a nadir of 179,200 in October 2009," Ingham said. "During the previous growth cycle, industry employment peaked at 223,200 in November 2008."
The TPI is a barometer of upstream oil and gas industry activity and is based upon a composite of economic indicators.