Independents crucial to Texas oil and gas

Alan Bailey

Independent oil companies now underpin the Texas oil and gas industry. Or, at least, that’s the conclusion of a new study conducted by the Texas Alliance of Energy Producers. The study concluded that independents now produce nine out of 10 of the barrels of crude oil produced in the state. The study also found that independents produced 86 percent of the state’s natural gas. And independents drilled 96 percent of the new wells in Texas in 2005, Alliance President Alex Mills stated.

The Alliance says that there is still a place for the majors in Texas but that most majors have left the state to seek larger fields around the world.

“Recently, we have seen some majors enter the natural gas play in the Barnett Shale in the Fort Worth basin,” Mills said. “Shell and ExxonMobil have jumped into the activity in the 20-county area around Fort Worth, but most of the majors have been selling their Texas production.”

But independent operators have also been taking the exit door on Texas oil and gas production — within the past 20 years 10,593 operators have left the oil business according to Texas Railroad Commission records.

“Today, 6,982 operators have filed with the RRC, which is down from 17,575 in 1986,” Mills said. But independents still account for the majority of the oil and gas activity in Texas, he said.

Can Alaska glean anything from the Texas experience? The oil majors have tended to dominate the Alaska’s oil and gas industry. And although some independent companies have established Alaska operations in recent years there is still only a tiny handful of companies operating in the state.