MIDLAND, Texas — The Railroad Commission of Texas issued well over 1,000 original drilling permits for the month of March. 557 of those permits were issued for the Midland area.
Industry leaders believe that this is a big deal for the oil and gas industry.
"It shows the operators today are looking to the future and the future means they want to drill more wells, and that’s a very positive sign for our oil and gas industry ahead," Kirk Edwards, president of Latigo said. "Even though the rig counts are not increasing, I think it came up one rig today overall in the state of Texas, the industry is still going to keep drilling more and more wells."
Even though all of those permits have been issued, completing those wells could take some time.
"Drilling companies will drill mainly probably 6 to 10 wells at a time, and so they can’t go back and complete those wells till they’re all ready to be completed at the same time," Edwards said. "So it really could be 6 to 8 months after a rig starts running that they start drilling all 6 to 10 wells and then they have to go back and frack them all at the same time."
Edwards said that this type of action is needed given what's happening between Russia and Ukraine.
"It’s needed in the world," Edwards said. "If you’re gonna take off Russia’s oil, then it’s got to be supplied somewhere else, and Saudi Arabia and the Permian Basin are the two places where that could happen. So I think it’s a very positive thing for Midland-Odessa and all of west Texas to have what’s going on right now."
Despite the permits, Edwards still expects the price of oil to remain high for the time being.
"I think the price is going to stay in the $100 range as long as Russian oil is off the world market," Edwards said. "If the Russian oil comes back on and Saudi comes back on, then you’ll see oil prices get pushed down into the $60-$70 range where we were a lot of last year."