The Texas Alliance of Energy Producers reported Wednesday that its monthly measure of growth rates and cycles in the state’s upstream oil and gas economy – the Texas Petro Index (TPI) – shows record declines across nearly all indicators from March to April.
“The Texas upstream oil and gas economy was already in a state of decline when COVID-19 came along, with drops in the number of working rigs and industry employment, but the rate of decline has obviously accelerated sharply in March and April,” Karr Ingraham, the Alliance’s petroleum economist and the TPI’s creator, commented in a written statement emailed to Rigzone.
Based at 100.0 in Jan. 1995, the TPI tracks indicators such as price, rig count, drilling permits, well completions and employment, the Alliance stated. The organization noted the index fell from 181.9 to 171.0 from March to April. It observed the 10.9-point drop represents the second-largest monthly decline on record, trailing only the 11.0-point decrease from Sept. to Oct. 2015 – amid the 2014 to 2016 oil industry downturn.
Other findings from the Alliance include:
- The April 2020 TPI represents a 19.7-percent year-on-year drop from the 212.8 figure for April 2019.
- The index registered a recent cyclical peak of 213.8 in Feb. 2019; through April 2020, the TPI has declined for 14 consecutive months.
- Texas’ crude oil production fell by an estimated 235,000 barrels per day from March to April of this year, marking the largest monthly decline on record.
- The state lost an estimated 25,800 upstream jobs from March to April – the largely monthly drop on record in terms of number and percentage of jobs lost.
- In April, just 456 original drilling permits were issued – Texas’ lowest monthly level since at least Jan. 1994, the first year of data collection for the TPI.
“The worst of the demand contraction is clearly behind us at this point, and hopefully we’ve seen the worst of the crude oil price environment in April as well,” Ingraham continued. “However, the fallout will continue for some time with more to come in the way of employment loss and idled production capacity, and the Texas Petro Index is certain to continue its decline in the coming months.”
More detailed data tied to the TPI appear in this Alliance document.
To contact the author, email mveazey@rigzone.com.
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