But effect on drilling won’t be seen for some time.
Posted: Monday, December 15, 2014 6:03 pm | Updated: 6:17 pm, Mon Dec 15, 2014.
By Jennifer Hiller | San Antonio Express-News | 3 comments
AUSTIN — There’s no slowdown visible so far. But oil prices slumping below $60 per barrel have started to cast a shadow over booming South and West Texas, where crowded restaurants, expensive hotel rooms, convoys of heavy trucks and “help wanted” signs have become as common as scrub brush.
Rising production from the Eagle Ford Shale and the Permian Basin this year helped push Texas oil production to levels not seen in a generation, above 3 million barrels per day.
But since those summer days when West Texas Intermediate Crude, the U.S. benchmark, soared above $100, it has gone on a months-long slide. According to Plains Marketing LP, WTI and Eagle Ford Light crude was selling for around $57.50 per barrel Wednesday.
“Nobody in our universe is pleased to see what’s happened to pricing in the last four or five months,” Ben Shepperd, president of the Permian Basin Petroleum Association, said at a Wednesday event at the state Capitol.
Companies planning 2015 spending are slashing budgets by as much as 30 percent, he said. “You can’t do that without laying people off. It’s real stuff,” Shepperd said.
But it’s likely to take time before the slowdown makes itself obvious in the field. Most operators, service companies and suppliers are in long-term contracts that are fueling the frenzied level of recent activity, with more than 568 drilling rigs hunting oil just in the Permian Basin in West Texas and eastern New Mexico last week. Those contracts can be hard to untangle overnight, Shepperd said.
“At least right now you’re not seeing these huge numbers of layoffs from what I understand,” he said.
Read more: Falling prices a cloud on South, West Texas – MRT.com: Oil http://www.mrt.com/business/oil/article_0ea5d252-84b7-11e4-9421-a35ccdeb054b.html#ixzz3MMPT4yLn
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