More than 32,000 Texans were forced out of their jobs in the energy industry from January through July and thousands more face “inevitable” job losses, according to the latest Texas Petro Index (TPI).

The state’s oil and gas industry “remains in free fall,” said TPI economist Karr Ingham, who created the TPI for the Texas Association of Energy Producers (TAEP). The TAEP is considered the largest state association of independent producers in the nation.

Based on a group of upstream economic indicators, the TPI in July fell to 215.5, down almost 25% since peaking at 285.4 in September and October 2008.

“Producers and oilfield service contractors are shedding jobs to shrink the industry’s workforce to the level required to operate 300 to 350 rigs in Texas,” said Ingham. “That adjustment is not complete, so it appears that thousands more Texans will be sent packing before this cycle hits bottom.”

The news came on the same day Houston-based Baker Hughes Inc. said it would merge with cross-town rival BJ Services Co. (see related story). The companies did not announce any job cuts from the merger agreement.

Drilling activity has stabilized in the past few months, but at a “very low level” compared with the same time in 2008 when the state’s oil and gas economy was peaking, said Ingham. According to the Texas Workforce Commission, the state’s total oil and gas employment reached 240,000 workers in December, but in July the workforce had declined to 207,700.

One of every 10 Texans working in the oil and gas industry has lost his or her job this year, Ingham estimated.

The TPI’s leading indicators in July reported:

In related news, Tudor, Pickering, Holt & Co. Securities Inc. reported in its Weekly Rig Roundup Monday that the U.S. land rig count was higher for the week ending Aug. 29 with all three of its rig data sources showing gains of five-13 rigs. Nearly all of the added rigs were gas-directed, TPH said.

Private explorers, which continue to drive activity gains, added 23 rigs for the week compared with the same period a year ago, TPH noted. The top 30 public exploration and production companies were down 12 rigs for the week from the same week a year ago.

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