The oil and gas industry is well into its recovery and embarking on “a new cycle of expansion,” according to the Texas Petro Index released Wednesday. The rig count is up 40 percent over the first quarter last year. Drilling permits have doubled. Employment has risen by 9,000 from the trough.
First quarter highlights include an average rig count above 360, more than 40 percent better than the same quarter last year, a doubling of drilling permits to 3,250, and a more-than-50 percent increase in average crude prices to almost $48.50 a barrel and natural gas to $3 per thousand cubic feet.
The factors together mark the first industry expansion in three years, since crude oil prices began to tank in 2014, falling by more than three-quarters to about $26 last year.
Other indicators have not yet caught up to last year’s first quarter. Crude oil production is down 3 percent to 291 million barrels. Natural gas is down 7.5 percent to 1.93 billion cubic feet. And employment has paused at 199,000, down 6 percent.
“We still have a long way to go,” said economist Karr Ingham, who created the index, a measure of the health of industry. “But 2017 is going to be a year of recovery and expansion in the Texas statewide oil and gas exploration and production economy.”
The Texas Petro Index is a service of the Texas Alliance of Energy Producers, the largest state association of independent oil and gas producers in the U.S.