A few signs of headwinds crop up in the Permian Basin

Oil fields in West Texas are teeming with drilling rigs after crude prices shot up to $50 a barrel this year.

But the Energy Department believes a key metric of drilling productivity is about to turn south in the Permian Basin for the first time since its analysts began tracking it in late 2013.

Next month, the daily oil production of a new Permian well drilled by an average rig will decline by 10 barrels to 630 barrels, the Energy Department said in a recent report.

Of course, that doesn’t even amount to a dent in the stunning productivity gains that oil companies have made in the Permian Basin over the past few years, but it’s an ominous milestone for companies that have touted increasingly efficient and productive drilling as a way to offset the financial pain of low oil prices.

It also coincides with another trend: In recent months, oil companies have drilled a lot more wells than they’ve brought into production. The number of so-called drilled but-uncompleted wells in the Permian Basin is expected to rise to 1,995 in June, up from 1,348 last August, when the Energy Department first began tracking these unstimulated wells.

Both of these recent developments, analysts said, are signs that drilling rigs are coming back to the Permian Basin so fast that they’re far outpacing the speed at which contractors can ready fleets of hydraulic fracturing equipment needed to blast open dense rock formations and bring the wells into production.

A big problem is that pressure pumping companies are spending between $5 million to $10 million rebuilding equipment they cannibalized for spare parts during the downturn in oil prices. Another challenge: getting people to come back to the oil patch after severe job cuts to staff up fracking fleets that require around 100 workers.

“A lot of the older class of the generation is like, ‘You know what, I’ve been through the boom and bust cycle, I’m either retiring or I’m going to move on to something safer,’ ” said Taylor Cavey, an energy analyst at S&P Global Platts in Denver.

Some of the larger operators in the Permian have their own hydraulic fracturing crews, but smaller companies and contractors have to find new workers.

“If you’re a local West Texas company trying to hire people, there’s nobody to hire,” said Andy Hendricks, chief executive of Patters on UTI Energy, a drilling rig and pressure pumping contractor. “They’re in either other parts of Texas or other states, and unless you’re a company of our size, you’re going to have challenges getting people.”

It has cost Patterson up to $3 million to deploy new hydraulic fracturing fleets with roughly 110 workers. The company’s rivals are spending at least twice that as they rebuild the fracking equipment they cannibalized during the oil bust, Hendricks said.

Still, overall production in the Permian isn’t expected to decline anytime soon, even with increases in prices for oil field services set to increase some 15 percent over the next year. The EIA said it expects daily oil production in the Permian Basin to rise by 71,000 barrels next month to 2.5 million. That’s up from 2 million barrels last June.

“If you’re a local West Texas company trying to hire people, there’s nobody to hire.” Andy Hendricks, Patterson-UTI Energy