Drilling in Texas Jumps 27% higher in March Over February

This ties the level of drilling in January.

This morning, April 7, 2024, markets are down again due to worries about Trump’s tariffs. If President Trump announces big tariff deals this week with some of the 50 countries reported to call the White House over the weekend, perhaps the markets will calm down. In my humble opinion, markets are greatly overreacting and hopefully will settle down in the face of some good news.

On the bright side, the Railroad Commission of Texas reported Friday, April 4, that oil and gas drillers in March did in fact “drill baby drill,” with a noticeable gain over the previous month:

RRC figures show 1,072 new drills recorded during March (up 27.5%), including 818 oil wells, 246 gas wells and eight dry holes. This compares to 841 total new drills in February, including 682 oil wells, 142 gas wells and 17 dry holes. This activity equaled January’s drilling, when 1,072 wells were recorded, including 814 oil wells, 242 gas wells and 16 dry holes. The distribution of wells in these categories was roughly the same in March, as it was in January.

This marks a substantial increase in the number of wells drilled, with wells drilled in March 2025 being 20.3% higher than in March 2024. As has been the trend, most of the drilling was in three Permian basin districts, 7C, 8 and 8A, comprising 67.3% of all drilling in the state.

The upward trend in drilling this year appears to be continuing, with continued increases in permitting:

The commission issued 696 original drilling permits in March 2025. The total includes 613 to drill new oil or gas wells, 15 to re-enter plugged wellbores, 5 field transfers, 1 reclass and 62 for re-completion. The breakdown of well types for total original drilling permits in March 2025 is: 137 oil, 52 gas, 469 oil and gas, 20 injection, 1 service, and 17 other permits.

My Take

The price of West Texas Intermediate crude has been trending down for the last 12 months, falling from around $85 per barrel to $60.27 this morning, April 7, 2025:

According to the Dallas Fed Energy Survey for the first quarter of 2025, conducted from March 12–20, 2025, the average breakeven price to profitably drill a new well across all respondents is $65 per barrel:

Average breakeven prices to profitably drill a new well increased just a little bit this year. Across all responses, the average was $65 per barrel, up $1 from last year’s average. Larger firms had an average breakeven of $61 per barrel compared to $66 for smaller companies.

Data were collected March 12–20, 2025, with responses from 130 energy firms. Of the respondents, 88 were exploration and production firms, and 42 were oilfield services firms.

With this morning’s WTI price at $60.27 per barrel, we will soon see if Texas oil company respondents told the truth that they need $65 per barrel to drill. If they do, drilling should slow this month. If they do not, we will see more “drill baby drill” this month and perhaps beyond.

Stay tuned.

Thank you for reading “Thoughts about Energy and Economics.” This publication is reader-supported, so please “Like” it, share it with friends and colleagues, and become a paid subscriber. Your support is greatly appreciated!