Economic development and job growth in Midland, Texas are getting a shot in the arm from rising drilling activity in the Permian Basin, resulting in new housing projects and construction labor shortages, according to a real estate developer and the Midland Chamber of Commerce.
Economists and financial analysts point frequently to the growth in the overall job market from indirect and induced jobs and the subsequent demand for housing that occurs as a result of oil and gas activity, and the link between the Permian Basin and Midland is no exception.
Oil and gas drilling in the Permian Basin has steadily risen in 2014, according to the Energy Information Administration (EIA). The rise in crude oil production in the formation is outpacing pipeline infrastructure, and the EIA projects that August crude oil production in the Permian will be nearly 1.7 million barrels of oil per day (bopd), an increase of more than .3 million bopd year-over-year.
Oil production from new wells in the Permian Basin is at a high for the year, and the rig count for oil and gas drilling is also at a yearly high, the EIA said. The average oil and gas production figures per rig are projected by the EIA to increase in October by 3 bopd and by 7,000 cubic feet per day, respectively, over September figures.
With the increase in oil and gas activity comes a need for more housing in Midland, Roger C. Gault, AIA, the developer of a new rental project, told Rigzone. Gault is the developer of Wall Street Lofts, a new rental project located “right in the heart of downtown Midland.”
Scheduled to open in November, the Wall Street Lofts are being constructed at a cost of more than $17.4 million. The complex will offer 5,000 square feet of retail space, and well as 108 one- and two-bedroom apartments that will range from 605 square feet up to 1,136 square feet, according to the Midland-Reporter-Telegram.
The project is a response to the need for reasonably priced housing options in downtown Midland, Gault said. Driven by rising demand from workers in the Permian Basin, the median housing price in Midland has risen more than 48 percent since July 2009, and now sits near $248,000, according to the Midland-Reporter-Telegraph.
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