Oil and gas producer SM Energy said on Wednesday it may temporarily shift drilling away from Utah’s Uinta Basin in early 2027, as takeaway constraints continue to limit production.
The basin is rich in oil and gas reserves but crude produced there requires specialized transportation, limiting takeaway capacity.
A planned expansion of a crude-oil terminal is expected to ease constraints by increasing rail-loading capacity.
SM Energy said on its post-earnings call that it was evaluating drilling reallocation while awaiting additional takeaway capacity.
Constraints in the basin, including an unplanned outage and refinery disruption, reduced the company’s third-quarter oil production by about 4,000 barrels per day.
While the refinery has returned to service, SM Energy said the rail-capacity constraints were expected to persist until the expansion enters service in early 2027.
SM Energy reported on Tuesday quarterly net income of $93 million, or 39 cents per diluted share, compared with $155 million, or $1.35 per diluted share, a year earlier.
It narrowed its full-year 2026 capital spending outlook to about $2.75 billion and lowered its oil-production forecast by 1% to 220,000 to 222,000 barrels per day.
(Reporting by Varun Sahay in Bengaluru; Editing by Joyjeet Das)