MIDLAND, Texas — The COVID-19 pandemic had a huge impact on just about every major industry. The oil and gas industry was no exception. Now, the industry is back on an upward trajectory with prices like we haven't seen in a long time.
"We haven’t seen oil prices this good since 2018," Kirk Edwards, president of Latigo and the former Permian Basin Petroleum Association chairman, said.
That price? It reached $72 a barrel. That is something that Edwards has described as a shot in the arm for the Permian Basin.
"It’s just a stability shot, something we needed," Edwards said. "Again, 2020 was probably the worst year any oil company has ever experienced with both low oil and gas pricing, so everybody is just kind of getting back to normal I would say from last year and so hopefully everybody can make money ahead and keep this going."
With as high as oil prices are right now, it came as a complete shock to industry leaders, including Edwards.
"I can promise you 100% nobody predicted $72 oil today here in June compared to where we were last year, and again it has everything to do with the big producers in the world like Saudi and OPEC," Edwards said. "If they put the oil on the market, if they put it over too much and the price goes down. Then if they take it off like they’ve done, the price will come up."
However, not everything is back to pre-pandemic levels. This includes the current rig count.
"The drilling rig count is not spectacularly high compared to where you would think it would be with oil prices doing this, because everybody is in a more conservative mode right now to drill and so you’re not seeing that euphoria that you would’ve seen in other years in the past, 2014 and 2018, when all the rigs started coming back," Edwards said.
To Edwards' surprise, the Biden administration has also played a role in the Basin's improvement, although indirectly, because of all the restrictions placed on federal drilling. That's something Texas doesn't have to deal with right now.
"We have no federal lands that they can mess with right now," Edwards said. "I’m sure they’ll find a way to mess with us somehow, they always do, but for right now being in Midland and Odessa, the Permian is by far the best place to drill anywhere in the United States and we hope it continues to be that way."