Shale play data you don't see everyday

By Staff | February 14, 2017

The health and trending direction for activity levels in most North American shale plays is typically linked to rig count or the number of active pressure pumping units deployed to a given region. But, there are always other indicators that can help us understand activity levels or the overall health of a given play. This week, take a look at information provided from the Federal Reserve Bank of Dallas. The Federal Reserve Banks—from Texas to Minnesota—do an excellent job of providing their respective regions with information on industry moods, projections and challenges or opportunities present for an industry in their region.

This month, the Dallas team provided a summary of the Permian Basin. Along with information gathered from the U.S. Energy Information Administration, their summary also includes data from the Texas A&M University Real Estate Center on home sales and building permits and home inventories. According to the data, the six-month moving average for Permian Basin home sales remains 265, with the December reading reaching 266. Home price averages is trending up in Midland, Texas, but not in Odessa. Housing inventory remains higher in Odessa. After oil prices and rig counts decreased in 2014, housing inventories in both places dropped, with Odessa showing a steeper inventory increase. Now, the trends are starting to shift in the opposite direction.

And, if the home data doesn’t help illuminate the reality that activity is quickly rising in Texas, then take a look at another data set provided by the Dallas Fed Reserve. While we have come accustomed to charts that provide breakeven prices to complete a well, we are now starting to see information related to the price of oil at which a new well could be drilled economically. The data from this week seems to highlight the change happening in the industry.