San Antonio Express-News
Oct. 10 –A little more than two years since the start of the worst oil downturn in recent memory, the Texas petroleum industry may finally be looking at the bottom as prices, rig counts and even employment show gains.
“We’re just looking at these little milestones. The employment is a big one; for it to stop dropping and for us to stop losing oil and gas jobs month-to-month is a big deal,” said Karr Ingham , an Amarillo -based energy economist.
While optimism may be in the air, Ingham’s Texas Petro Index for August, released Friday, showed a 35.2 percent decrease year-over-year from 2015, a decline from 232.5 to 150.5. It also marked the 31st consecutive month that the index has fallen. The index is based on rig counts, drilling permits, oil production and other industry data.
The August figure is a 52 percent decline from the Index’s November 2014 high of 313.5, which corresponded with a precipitous drop of oil prices that hit bottom at $26.21 a barrel this February. Ingham produces the index for the Texas Alliance of Energy Producers , an industry trade group.
Despite the drop, Ingham said he believes all signs indicate the worst may be over, although he’s not sure the industry has hit rock bottom just yet.
“The bottom to me is when we have an increase from one month to the next in the Petro Index, which has not yet occurred,” Ingham said. “Will it occur from August to September? I don’t know that yet — it’s very possible.”
According to Baker Hughes , which monitors the number of rigs in the field, the U.S. rig count bottomed in May 2015 at 404 active rigs. That figure stood at 524 for the week ending Oct. 7 .
Oil prices have also recovered somewhat, with futures for West Texas Intermediate trading above $51 a barrel Monday. Recent pronouncements by members of the Organization of Petroleum Exporting Countries that member states will reduce production and corresponding statements by Russian President Vladmir Putin have sent prices up by more than $5 over the last week.
Omar Garcia , CEO and president of the South Texas Energy & Economic Roundtable, or STEER, said that “there’s still activity in South Texas .”
“You still have active drilling, you still have production. Investment is still happening in South Texas ,” said Garcia. “Obviously not at the rate that we saw the last several years, but it has been fairly steady the last several months in the Eagle Ford.”