Drilling permits in Texas nearly double this year

UPI:
Accounting for about half of all the active rigs in the United States, the energy regulator in Texas said total drilling permits nearly doubled from last year.

The Railroad Commission of Texas, the state energy regulator, said it issued 1,011 original drilling permits last month, compared with the 631 issued in July 2016. Of those, 893 were for drilling new oil or natural gas wells.

According to the U.S. Energy Information Administration, Texas shale is the most productive in the nation. Based on its latest drilling productivity report, the EIA expects production from the Permian shale basin to increase 2.5 percent from July for about 2.5 million barrels per day. Eagle Ford production would increase 2 percent to 1.38 million barrels per day if EIA forecasting is accurate.

A report from global consulting firm McKinsey & Co. found that, under a scenario where crude oil prices move above $60 from 2019, output from the Permian shale basin in Texas, one of the more lucrative reservoirs in the country, could drive about 20 percent of the growth in exploration through 2021, in part because efficiency has improved.
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The rig count will vary in accord with market forces.  With OPEC no longer to determine the market price of oil on a sustainable basis the shale producers have effectively put a cap on OPEC that generally corresponds to their break even price which is lower in many cases than OPEC producers.

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