Forget North Dakota Oil, Texas is No. 1 for Oil

Thursday, February 13th, 2014 and is filed under Oil and Gas Current Events

By Daniel J. Graeber for OilPrice.com

Advances in drilling technology are expected to help North Dakota hit the 1 million barrel per day mark at some point this year. But it’s Texas that still holds the leadership position in terms of oil production. Don’t mess with Texas.

The Texas Railroad Commission, the state’s energy regulator, said 54.4 million barrels of oil were produced in the state in November, the last full month for which data are available. While only 1.5 percent greater year-on-year, that figure is 82 percent higher than five years ago.

In January, the Texas Petro Index, a composite of upstream factors, peaked at 295, suggesting state production was on pace for another banner year. When oil service company Baker Hughes released its rig count last week, Texas was one of the bright spots in an otherwise disappointment assessment of U.S. basins. While shale plays in the Appalachian basin led the declines, Texas as a whole gained three new rigs for 845 and, combined, the Eagle Ford and Permian basins accounted for the bulk of the state’s count.

The U.S. Energy Information Administration said that although most wells in Texas contain a mixture of oil and natural gas, “relatively” high oil prices and “low” natural gas prices mean oil components in Texas are “desirable for production, and therefore increasingly the targets for the drilling of new wells.”

Much of the shale narrative in North America has focused on the rise of North Dakota, now the No. 2 oil producer in the United States. North Dakota oil production in November of 29.1 million barrels was an all-time high but roughly half of what Texas produced the same month. The North Dakota Industrial Commission said the state’s rig count was down 12 percent from its record 218 set in mid-2012 and blamed that on “uncertainty surrounding federal policies on taxation and hydraulic fracturing regulation.”

Read more: http://www.nasdaq.com/article/forget-north-dakota-texas-is-no-1-for-oil-cm325438

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