Oil and gas activity in Texas, Louisiana and New Mexico rose modestly in the second quarter of 2024, the Federal Reserve Bank of Dallas said on Wednesday in its quarterly survey of energy firms.
Second quarter oil and gas production was little changed, according to executives polled. The survey covered 90 exploration and production firms and 48 oilfield services firms. The polling was conducted from June 12 to 20.
Just under half of 130 executives polled expect oil production to fall slightly if the merger wave continues over the next five years. However, executives from companies that pumped 100,000 barrels or more all said they expect no impact on their output, the Fed said.
“The majors are not going to exhaust reserves to raise domestic production until supply and demand curves meet their goals. They do not have to participate in treadmill drilling to keep incomes at a pace to develop reserves and pay back loans,” one respondent said.
Costs rose at a slightly faster pace for oilfield services, but at a slower pace from exploration and production firms, the survey said.
The Dallas Fed’s employment index was positive for the 14th consecutive quarter but the low single digit result suggested slow overall hiring, the survey said.
Seventy-one percent of executives said they were aware of oil and gas companies attempting to extract lithium from oil field brine. But 73% said their companies are not are unlikely to do so.
On average, respondents expected a West Texas Intermediate oil price of about $79 per barrel at year-end 2024, the survey showed, compared with an $80 forecast in the prior quarter.
Meanwhile, 14% of polled E&P firm executives said low gas prices in west Texas will have a significantly negative impact on their firms’ drilling and completion plans in the Permian through to the end of this year.
Half of polled executives are not using artificial intelligence and have no plans to do so in the near future.
AI’s appeal was more evident among the survey’s larger firms, or those that produced 10,000 barrels per day or more. But among smaller firms, those producing less than 10,000 bpd, only around 16% of firms were using AI.
(Reporting by Georgina McCartney in Houston, editing by Gary McWilliams and Nick Zieminski)