With the recent dip in oil prices, it might make sense that some operators in the Permian and Eagle Ford basins are wary. After all, with nearly half a million industry jobs in the state, any changes to production could have wide-reaching consequences. However, as the Texas Tribune recently reported, officials see no change to the status quo on the horizon.
"There's no alarm or red flag going up at the moment. We're pretty much staying the course," explained Don Tymrak, city manager of Karnes City, in the heart of the Eagle Ford Shale region.
Texas is currently producing double the amount of oil it was only three years ago, and contributes more than a third of total U.S. production. But even as prices slip, infrastructure investments continue to pour in. New pipelines, vertical wells and water containment facilities can be seen springing up in production areas.
"I don't think those communities – with what we've seen thus far – are going to see many impacts," Bill Kroger, co-chairman of energy litigation at the Baker Botts law firm in Houston, told the Texas Tribune. "They have quite an investment in there, and they're not going to change that because the price is not the same today as yesterday."
West Texas Intermediate oil is considered the U.S. benchmark product, and is currently demanding costs hovering slightly above $80. However, according to the source, prices of $50 or $60 per barrel can still be profitable in parts of the Permian Basin, especially when produced by cost-effective vertical wells.
The changes in the current market could require some organizations in the industry to seek oil and gas strategy consulting to find new ways to streamline production and increase profit margins.