The Texas oil and natural gas sector may be facing challenges in the low oil price environment but it's well tooled to weather the storm, officials said.

The Railroad Commission of Texas, the state energy regulator, reported total crude oil production for January, the last full month for which data are available, was 2.2 million barrels per day, up from the 1.9 million bpd reported in January 2014.

Texas is the No. 1 oil producer in the nation. About half of all rigs actively exploring for or producing oil in the United States are in Texas. Railroad Commissioner Ryan Sitton told the San Antonio Petroleum Club the state is rivaling its national and international peers as a result.

"The long-term fundamentals for Texas oil and gas producers remain incredibly strong," he said.

The Federal Reserve Bank of Dallas in January warned demand for oil services in the Permian and Eagle Ford shale basins had slowed down. Oil services company Halliburton announced cuts in staff from its Houston offices the same week.

Halliburton's move followed others in the industry looking to streamline capital in the current bear market for crude oil.

Fellow Commissioner David Porter told the Texas A&M University School of Law success came in part because of effective state policies.

"Texas is blessed with an abundance of natural resources, but we aren't the nation's leading energy producer because of our geology alone," he said. "As Railroad Commissioner, it is my job to make sure industry produces safely and responsibly, and that they are able to do so in the most efficient, economical way possible -- without the burden of excessive regulation."

Texas hosts about one-third of total U.S. crude oil reserves. Data from the U.S. Energy Information Administration finds the Permian shale basin in Texas is among the few in the country expecting a production increase this month.