According to the Texas Independent Producers & Royalty Owners Association (TIPRO), crude oil production in the state of Texas totaled an estimated 1.35 billion barrels through November of 2018, representing an increase of 209 million barrels of oil produced compared to the same timeframe in 2017, and a total of 1.5 billion barrels forecasted for the full year. Natural gas production increased slightly for a total of 7.5 trillion cubic feet of gas produced through November. TIPRO reports that most of the increased output and related activity came from West Texas with Permian Basin oil production surging last year.
“With lower crude oil prices and increasing service costs, many operators are understandably looking at scaling back spending to stay within cash flow until market conditions improve,” said Ed Longanecker, President of TIPRO. “Despite numerous operators cutting capex in 2019, Texas oil and gas production is expected to rise in the coming months as additional pipeline capacity comes online in the Permian Basin, OPEC production cuts take full effect, oversupply concerns ease, and progress is made with U.S. China negotiations,” added Longanecker.
While 2018 oil and natural gas production continued to rise, industry job growth stalled in November. More than 10,000 net new oil and natural gas jobs were added to the state’s economy through November of 2018 compared to 2017, for a total of 336,000 workers directly employed by the industry. Upstream sector jobs accounted for the majority of the employment growth last year with more favorable market conditions driving increased exploration and production activity, with a total of 78,000 oil and gas extraction jobs and 142,000 oil and gas support activities jobs in the state through November.
“Job growth in the Texas upstream sector was essentially flat in November compared to many months of consecutive growth. A slowdown in employment was expected due to the impact of takeaway capacity constraints in West Texas, lower crude oil prices, added expense to E&P projects from increasing service costs, as well as rising material costs resulting from steel and aluminum tariffs. Ongoing innovation and efficiencies being utilized in the industry, expanding pipeline capacity, and an expedited resolution to trade disputes will support increased energy production and job growth for the state of Texas,” added Longanecker.
TIPRO is a trade association representing the interests of nearly 3,000 independent oil and natural gas producers and royalty owners throughout Texas. As the largest statewide association in Texas that represents both independent producers and royalty owners, members include small businesses, the largest, publicly-traded independent producers, and mineral owners, estates, and trusts.