Watch stocks you care about
The single, easiest way to keep track of all the stocks that matter...
Your own personalized stock watchlist!
It's a 100% FREE Motley Fool service...
- Oil Drilling Disappointment for Anadarko off New Zealand
- Why the World Should Brace for a Future U.S. Oil Embargo
Advances in drilling technology are expected to help North Dakota hit the 1 million barrel per day mark at some point this year. But it's Texas that still holds the leadership position in terms of oil production. Don't mess with Texas.
The Texas Railroad Commission, the state's energy regulator, said 54.4 million barrels of oil were produced in the state in November, the last full month for which data are available. While only 1.5 percent greater year-on-year, that figure is 82 percent higher than five years ago.
In January, the Texas Petro Index, a composite of upstream factors, peaked at 295, suggesting state production was on pace for another banner year. When oil service company Baker Hughes released its rig count last week, Texas was one of the bright spots in an otherwise disappointment assessment of U.S. basins. While shale plays in the Appalachian basin led the declines, Texas as a whole gained three new rigs for 845 and, combined, the Eagle Ford and Permian basins accounted for the bulk of the state's count.
The U.S. Energy Information Administration said that although most wells in Texas contain a mixture of oil and natural gas, "relatively" high oil prices and "low" natural gas prices mean oil components in Texas are "desirable for production, and therefore increasingly the targets for the drilling of new wells."
Much of the shale narrative in North America has focused on the rise of North Dakota, now the No. 2 oil producer in the United States. North Dakota oil production in November of 29.1 million barrels was an all-time high but roughly half of what Texas produced the same month. The North Dakota Industrial Commission said the state's rig count was down 12 percent from its record 218 set in mid-2012 and blamed that on "uncertainty surrounding federal policies on taxation and hydraulic fracturing regulation."
Karr Ingham, the man behind the Texas composite, said that, given the exponential rise in production, the pace of acceleration in Texas will likely slow down a bit in 2014. That doesn't mean it will fall from the No. 1 spot anytime soon, however.
Major oil companies reported less-than-favorable profits during the fourth quarter in part because of lower oil prices. Marathon Oil Corp. last week reported a drop in fourth-quarter profits but said the outlook was good for its unconventional operations in North Dakota and Texas. For North Dakota, Marathon Oil Chief Executive Officer Lee Tillman said production from the much-lauded Bakken play in North Dakota was up 34 percent year-on-year but up 136 percent for the Eagle Ford shale. For the last two weeks of 2014 alone, Marathon said it averaged more than 100,000 net barrels of oil equivalent per day from Eagle Ford.
When presenting the biennial revenue estimate to Texas Gov. Rick Perry last year, state Comptroller Susan Combs said that, like North Dakota, "burdensome regulations" are casting a shadow over Texas shale. Nevertheless, though much of the North American shale focus has been on North Dakota, EIA still expects the Texas oil boom will continue.
America's energy boom is far from over
Record oil and natural gas production is revolutionizing the United States' energy position. Finding the right plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg. For this reason, the Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free.