Houston (Platts)--21Apr2011/701 pm EDT/2301 GMT

Texas oil and natural gas producers are keeping a wary eye on the dozens of wildfires raging across the state, although to date they have not resulted in any serious disruptions to production or flows, sources say.

As of Thursday, more than 1 million acres of the Lone Star State had been hit with wildfires, as Texas and much of the US Southwest remains in the grip of a months-long drought.

The most significant fire-related impact on the sector was seen around a week or so ago when a utility, Southwest Texas Municipal Gas, shut off gas service to the western Texas city of Fort Davis after the Rock House wildfire destroyed power lines, causing electric service to the town to be shut off.

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Randy Guzman, STMG general manager, said the company had restored gas service by Thursday afternoon to almost all of the utility's about 390 Fort Davis customers.

Guzman said the company ordered the gas shut-in after the fire, which started outside the nearby town of Marfa, moved toward Fort Davis, destroying power lines leading into the town.

"The pumps went down in the city of Fort Davis and they were unable to pump water into the fire trucks," Guzman said. "It shut down the whole city."

During the April 16-17 weekend shutdown, West Texas Gas, the distribution company that serves the larger region, shut down the city-gate interconnection to Fort Davis and replaced the existing regulators with new ones.

"We were pressuring up distribution lines after lunch Tuesday. Everything was fine. The system was good," Guzman said.

The impact of the fires on the state's exploration-and-production industry was harder to determine Thursday, as several sources told Platts of hearing of isolated shut-ins of individual wells as the fires approached too close. However, no official agency was able to provide any hard data on the fires' effects on gas production.

The Texas Railroad Commission, which oversees the E&P industry, had received no reports of fires, well blowouts or oil spills related to the wildfires as of late Thursday, according to an email from spokeswoman Ramona Nye.

However, Alex Mills, president of the Texas Alliance of Energy Producers, said he had receive anecdotal reports of "lots of crude oil production that's going to be severely damaged," as a result of the Possum Kingdom Lake fire about 85 miles west of Fort Worth.

Although the region is located to the west of the core area of the gas-prone Barnett Shale play, it is home to a number of older oil-related facilities.

"Most of it is from old oil production, pre-Barnett Shale activity," Mills said.

In addition, in the Permian Basin region of West Texas and eastern New Mexico, "both oil and gas production is going to be affected" by the wildfires, he said.

--Jim Magill, jim_magill@platts.com