Oil industry experts say rig counts slowly rising in Permian Basin

LUBBOCK, TX (KCBD) - Oilfield experts say the Permian Basin is experiencing a slow and steady increase in the number of rigs, good news after several years of decline.

Texas Tech's Chair of Petroleum Engineering, Dr. Marshall Watson, says "boom and bust" is the best way to describe what has happened in the oil and gas industry from the mid-2000s until now.

"Around 2014, prices started to collapse, or did collapse, and of course we saw a precipitous drop in both employment and rig use," Dr. Watson said.

Though the effects were felt across the industry, Dr. Watson says the Permian Basin here in West Texas experienced a shorter-lived bust.

"It's the most active. If you look at drilling activity in every single basin in the world, the Permian Basin is the far leader right now," he said.

One article from fuelfix.com suggests that 2017 is looking up for our basin, since the rig count for April had gone up to 337 from 310 in March.

Dr. Watson explained why this is happening. He says the Permian Basin is efficient and produces more oil than other basins.

And he says there is more room to grow with that rig count.

"The Permian Basin wells are much more prolific, there were multiple zones. So if you go to the Eagle Ford for instance, you only have one zone, where in the Permian Basin you may have two, four maybe as much as six different zones that are stacked on top of one another all acting like one Eagle Ford-type shale play," Dr. Watson said.

He says the basin is always a hub for innovation.

"What you've seen is a tremendous advancement, not just in technology but in efficiency. So now we can drill these wells at a fraction of the cost of what we were drilling back five years ago, six years ago," Watson said.

But he says with prices around $50 a barrel right now, it can still be difficult for his graduating students to find jobs.

He says the manual labor oilfield jobs are in demand, so it's changed the way they teach.

"What we're trying to do at Texas Tech is teach and give those students skills that a blue-collared worker would have. So not only doing engineering work but they could do blue-collared work as well, to at least try to get an entry into the oilfield and maybe work their way up the ladder," he said.

While Dr. Watson says he doesn't see an oilfield boom in the near future, he says this gradual upturn is a good sign.

"If we stay in the $40 to $50 range, I think we can see slow but steady growth...when you think through it, it's the best of all news. Because you don't want boom and bust," he said.

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