The oil market downturn has not caused a substantial increase in abandoned oil and gas wells in Texas, a top state oil and gas regulator said Tuesday.
"We're monitoring that issue closely, but we have not seen a significant increase in that number of high risk wells," said Lori Wrotenbery, director of the Railroad Commission of Texas' oil and gas division, during a panel discussion at the US Energy Information Administration's annual conference.
Texas has roughly 435,900 drilled wells, including 323,500 active wells, including about 280,000 wells producing oil or gas and several service, injection and disposal wells, she said Tuesday.
There are about 112,400 inactive wells, which Wrotenbery said was in line with the average over the past 15 years of about 110,000 inactive wells.
State officials have identified about 9,500 wells which have either been abandoned or are at risk of being abandoned by operators, she said. About one-third of these, however, could be operators who have been delinquent in filings with the commission and could be remedied shortly, she added.
Texas produced nearly 2.49 million b/d of crude oil in April, about 520,000 b/d less than what was produced in April 2015, according to Railroad Commission data.
Many US producers, including operators in the Permian and Eagle Ford plays, see breakeven prices at just above $30/b, said Mine Yucel, director of research with the Federal Reserve Bank of Dallas, during the EIA panel. But producers likely will not start drilling new wells until WTI prices average above $50/b, Yucel said.
During a panel at the conference Monday, Lars Eirik Nicolaisen, a partner with Rystad Energy, said the amount of current global capital spending is not enough to materially grow oil production going forward and that a supply crash is likely without a jump to $70/b in the near future.
In its Short-Term Energy Outlook Tuesday, EIA said it expects WTI to average $43.57/b in 2016 and rise to $52.15/b in 2017.
