Texas Drilling Permits Fell in March, Completions Rise
Texas's energy regulator issued fewer new drilling permits in March than a year ago, but well completions rose, according to data released on Friday by the state.
A total of 1,220 original permits were issued last month, down about 7 percent from the same time last year. Roughly half of the permits were for oil and gas wells in the Midland area, home to the country's most active shale area, the Permian Basin.
The number of completions processed by the Railroad Commission, which regulates the state's oil and gas industry, climbed sharply this year, a sign that producers were ramping up hydraulic fracturing activities and working through a backlog of drilled, but uncompleted wells, or DUCs.
The Railroad Commission has processed 2,712 well completions so far this year, compared with 1,925 in the same period last year. Last month, 656 oil completions were processed versus 586 the same time last year, according to the data.
Although completions in Texas rose, the number of DUCs in the Permian also continued to rise, according to data from the U.S. Energy Information Administration. As of February, there were 2,937 DUCs in the region, a gain of 122 from the month prior, the EIA said in its latest Drilling Productivity Report.
About half of all active drilling rigs in the United States are operating in Texas, according to data from energy services firm Baker Hughes GE.
A boost in oil prices above $60 a barrel has enticed oil and gas companies to ramp up activity, with drillers adding 11 oil rigs last week, bringing the total to the highest level since March of 2015.
On Friday, benchmark U.S. crude futures declined more than 2 percent to under $62 a barrel after U.S. President Donald Trump threatened to levy new tariffs on China, further stoking fears of a trade war.
(Reporting by Liz Hampton)