Texas Petro Index suggests oil, gas slump ending

Despite heavy losses throughout the industry, the most recent Texas Petro Index suggests that the “dire circumstances” in which the state’s exploration and production companies find themselves in may be “bottoming out.”

According to the report, Texas crude oil prices averaged $65.73 per barrel in September, up from the February low ebb of $35.87 per barrel. Despite oil’s improvement, natural gas prices remain dismal: gas prices in Texas during September averaged $2.65 per thousand cubic feet. The wellhead value of Texas-produced natural gas throughout 2009 is about $19.9 billion, down from more than $52 billion during the first nine months of 2008.

The Texas Workforce Commission’s seasonally adjusted oil and gas upstream employment estimate indicates the state’s oil and gas employment increased in September, reported Karr Ingham, a petroleum economist who created the TPI for the Texas Alliance of Energy Producers.

“The month-to-month increase from August to September suggests the worst of the job losses in the oil and gas industry may be in the past,” Ingham said in the statement. “That development, along with the noticeable uptick in drilling rig activity, may offer early evidence of the beginning of the end of the current downward slide in exploration and production activity in Texas.”

Oil and gas industry employment at the end of September was 203,900, compared to the previous month’s 201,800, while the active drilling rig count averaged 380, up from June’s 329 but down almost 60 percent from 12 months prior. Texas drilling activity peaked in August 2008 at a monthly average of 958 rigs.

Chief updates Marcellus progress

Chief Oil & Gas LLC outlined its Marcellus Shale development, reporting that the Dallas-based company has drilled 39 wells in the Appalachian gas play and leasehold has increased to more than 560,000 acres.

The company’s 2010 development budget is set between $325 million and $350 million with seven rigs running and 70 planned wells, primarily horizontal, for the year. Its midstream subsidiary has secured seven interstate pipeline interconnects, according to a statement.

“After analyzing our research and results, we have identified at least three key areas for development in the Northeast and Southwest,” said Michael Radler, chief operating officer, in the statement. “Our current goal is to focus on specific areas, such as Susquehanna County, where we have 15 wells planned in 2010 and will begin testing multi-well completion techniques.”

Two join Raymond James

Houston energy office

Raymond James & Associates Inc.’s energy investment banking group in Houston gained two employees: Karen Jacobson, who joins as senior vice president–geosciences, and Raymond Wong, as senior vice president–engineering.

Jacobson has 30 years of oil and gas industry experience, according a statement, having previously worked for Amoco Production Co., Opal Energy Inc, oil and gas mergers and acquisitions advising firm Scotia Waterous Inc. and more. Meanwhile, Wong, who also spent time at Scotia Waterous, joins with experience gained in the oil and gas investment banking arm of Bank of Nova Scotia and various positions at Chevron.

“We are delighted to have such experienced oil and gas professionals as Karen and Raymond join our energy investment banking team as we build the technical capability within our asset acquisitions & divestitures advisory practice” said Christopher Simon, managing director and head of Asset Acquisitions & Divestitures at Raymond James & Associates.

jtronche@bizpress.net