Oil and gas activity remained essentially unchanged and optimism waned as uncertainty jumped, a survey of oil and gas executives by the Dallas Federal Reserve Bank showed.
Some of that uncertainty is centered around the lower average oil prices in the fourth quarter and questions over OPEC’s ability to influence oil prices, said the Bank’s Director of Research Chiara Scotti.
“The company outlook for E&P firms changed more drastically, as the company outlook index for these firms fell sharply from 46.8 to -9.0”, the survey showed.
Oil production has increased in the US Lower 48 but at a slower pace, according to the Bank’s latest survey.
There is also an expectation that there will be more large mergers and acquisitions, and the larger companies focused on debt reduction and M&A.
“Executives at larger E&P firms are more likely to report their goal for 2024, their primary goal, is to acquire assets or reduce debt,” Scotti said in a news conference on Wednesday.
The primary goal for smaller E&P firms in 2024 is to maintain growth production, said Scotti.
In 2024 there was a moderation in input cost increase for service firms.
“Firms which have more scale, firms that have more production, they are able to have more negotiation power”, said Scotti.
Employment in the energy sector remained unchanged as rig count declined and the industry has become very on account of increased efficiency, said Scotti.
(Reporting by Curtis Williams in Houston; Editing by Franklin Paul and Nick Zieminski)