A new report released Thursday, August 29, 2019, by the Texas Independent Producers & Royalty Owners Association (TIPRO) shares insight into oil and gas production and employment trends over the first half of 2019. TIPRO’s 2019 Midyear Texas Energy Report, part of the association’s “State of Energy” report series, projects the oil and gas industry supported 365,511 direct jobs in the state of Texas during the first half of the year, representing an increase of nearly 10,000 jobs over the previous year. On average, oil and gas jobs in Texas paid 134 percent higher wages than the private sector, with annual industry wages averaging $130,000 and a total state payroll of $47 billion, cites new findings from the TIPRO report.

“The Texas oil and gas industry remains a powerful employer in the Lone Star State, as evidenced by findings of the new mid-year TIPRO report,” said Eugene Garcia, chairman of TIPRO. “In the first half of the year, the Texas oil and gas industry accounted for 40 percent of all oil and gas jobs nationwide.”

Overall job growth in the industry has aligned with historic levels of oil and natural gas production in the Lone Star State, although TIPRO forewarns of a potential slowdown in hiring in the second half of 2019. As the nation’s top producing state, in the first half of 2019, oil production increased by 131 million barrels compared to the first half of 2018, for a total of 882 million barrels produced in Texas. Natural gas production in Texas also rose by 580 million cubic feet of gas in the first six months of the year compared to the first half of 2018, notes TIPRO, for a total of 4.9 trillion cubic feet of gas. Oil and natural gas production in Texas is on track to break all previous production records in the state for the full year of 2019, with estimated production expected to surpass 1.7 billion barrels of oil and natural gas production potentially exceeding 10 trillion cubic feet.

Strong production gains in Texas this year have primarily been driven by soaring production from the Permian Basin, the nation's most prolific oil producing area located in West Texas and eastern New Mexico. Crude oil production from the formation today accounts for nearly two-thirds of Texas oil production, says TIPRO.

As of mid-August, the Texas rig count hovered near 450, representing approximately half of all active rigs in the United States. According to Enverus (formerly DrillingInfo), over the last year, the Anadarko Basin has accounted for 33 percent of the decline, or 55 rigs. The Permian Basin experienced the second-largest rig count decline among U.S. basins during this period, dropping 42 rigs, which accounts for 25 percent of the total U.S. rig count decline. The Gulf Coast has seen the third-largest decline, dropping 37 rigs over the last year. Together, these three basins make up 79 percent of the decline in active rigs over the last year.

Although oil and gas production keeps climbing in Texas, the number of drilling permits issued from the Railroad Commission of Texas through the first half of 2019 has also gone down, TIPRO observes. State data shows that in July the commission issued a total of 912 well permits, down from 1,001 issued in June, and from 1,153 approved last July. The number of oil, gas and injection well completions also dipped in July to 699, compared to 940 over the same time last year. Total well completions processed for 2019 year to date are 5,749, according to the Railroad Commission, a drop from 6,514 recorded during the same time period in 2018.

TIPRO attributes slowing drilling activity to a variety of factors, including infrastructure constraints in West Texas along with volatile market conditions. “Technological advancements continue to make oil and gas operations more efficient, allowing Texas to achieve record-setting production of oil and natural gas despite a dip in drilling activity,” said TIPRO President Ed Longanecker. “As detailed in the new TIPRO report, over the first half of the year, operators have been successful in growing domestic energy production levels and adding new jobs while also facing a broad array of issues, including the United States’ escalating trade war against China. Uncertainty in the market, not necessarily supply/demand fundamentals, is contributing to the volatility with commodity prices. Unless these issues can be resolved, the United States could experience a slowdown in domestic production growth and an insufficient number of wells to offset the decline rate in the short-term.”

“As the leading organization in Texas representing independent producers and royalty owners, TIPRO remains committed to supporting measures that will grow oil and gas output, boost economic growth and strengthen national energy security for the United States,” added Longanecker.

Key findings from TIPRO’s midyear energy analysis include:

See TIPRO’s complete report by visiting https://bit.ly/2Ud4QvC.  

Find other oil and gas insights through the TIPRO website at http://tipro.org/newsroom/tipro-energy-reports.