Along with oil prices and the rig count, the issuance of new drilling permits has dropped off dramatically in the last 12 months, according to numbers from the Texas Railroad Commission report of 864 permits issued in August.
The commission, which regulates oil and gas activity in the state, said in a release that the issuance of drilling permits declined 65 percent year-over-year in August 2015. Among the 864 permits, the breakdown for August this year included 222 oil wells; 59 for gas; 518 for oil or gas; 54 injection wells and 11 other permits.
Total well completions for 2015 year to date are 14,665, down from 20,657 recorded during the same period in 2014.
At less than $45 per barrel Sept. 15, oil prices are less than half their price from 12 months ago, which was near the beginning of their descent. The rig counts in the United States have consistently dropped most weeks this year, too.
In a recent note to investors, analysts at Raymond James & Associates in Houston said production isn’t expected to rebound significantly until 2017. RayJa expects crude prices will reach $60 per barrel by the end of 2016 and will average $70 per barrel in 2017. Based on that scenario, rig count will continue to fall by 9 percent (about 100 rigs) next year, but will then increase by an average of 48 percent (440 rigs) in 2017.
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