Good read on the status of the Texas oil industry... [View all]

[KY_EnviroGuy]

Texas oil industry faces prospect of collapse amid Covid-19 losses
Oil and gas producers are trying to reopen after a ‘devastating’ halt, but pessimism about an economic recovery is widespread
Larry Madowo in Dallas @LarryMadowo
The Guardian World News
Fri 26 Jun 2020 09.00 BST

Link: https://www.theguardian.com/us-news/2020/jun/26/texas-oil-industry-layoffs-shutdown-economy

Excerpts:

The shutdowns have led to apocalyptic headlines proclaiming that the state could lose 1 million jobs, and at least $24bn by the end of the year. Oil and gas companies have paused or curtailed production and halted capital expenditures to conserve cash leading to mass layoffs as the world shut down. In April alone, the industry shed a historic 26,300 jobs in Texas.

New coronavirus cases are increasing to record numbers and the state has paused its reopening plans. But the oil and gas industry cannot afford another shutdown as it smarts from one of its worst years in decades.
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“Rig counts, which are potential proxy for oilfield activity, fell starting around January 2019 leading to overcapacity, and lower prices,” says Kunal Patel, a business economist with the Federal Reserve Bank of Dallas. In the second quarter of 2020, business activity in the sector hit its lowest level since the Dallas Fed started its survey four years ago.

“There’s a lot of stress in the industry,” says Patel. “There’s been a major pullback in drilling and completing wells.” The outlook of the 168 energy firms in Texas, northern Louisiana and southern New Mexico collated in the Dallas Fed’s Energy Survey has improved but is still negative. Output has fallen for both oil and natural gas and the employment index is significantly down as firms continue to cut headcount. “We reached the bottom, and now we’re trying to climb up. It will be quite a while to get back up the hole to the pre-Covid level of activity and service pricing,” one insider says in the survey.

KY.........